https://www.rnz.co.nz/news/business/514454/reserve-bank-considers-the-digital-dollar-nz-s-money-must-innovate-to-stay-relevant
New Zealand could be using a government-backed digital currency by the end of the decade.
Whenever I hear things like this, I ask 'What's the problem they are actually trying to solve?'
Most of the time there is no problem, it's a solution looking for a problem. In this case, it seems like the only problem to solve is:
Today, New Zealanders still cannot make instant payments electronically to other people, unless they are both with the same bank."
I'm pretty sure that could be solved with a middle-man app instead of a 'digital currency.' Venmo exists in the US, something like that?
I'm sure we have had similar.. TradeMe has Ping which "Make payments safely with Ping. Pay or get paid instantly – using a credit or debit card, or Ping balance." .. so, yeah problem already solved, instant payments.
I think the problem to solve is that you can't do it for free. Currently you get charged fees for every transfer, something that doesn't happen with cash.
Plus this is a single standard. If I go to pick up a trademr purchase I'm unlikely to be able to pay with Venmo, because there are a dozen other options and no one has heard of any. With a government backed option, people can start advertising that they accept it, and vendors/banks know where to focus their efforts.
Whenever I hear things like this, I ask ‘What’s the problem they are actually trying to solve?’
Let me list some possible benefits. Presume a premined centralized currency like XRP.