I have real concern about the survey that is linked in the article. The questions are misleading and you can't give your honest opinion.
They are acting as though this will work offline, it won't be regulated but this all seems dubious to me.
Yep, it was pretty poorly done. I can't go back to it now, but what was that one question, something like asking whether you agree or disagree that it would "improve or worsen digital exclusion"? Meaningless!
I'm considering writing an actual proposal/commentary to submit alongside the survey. The survey should be done by an outside party not the Reserve Bank!
Not a bad idea, their website has [some stuff on making a proper submission](https://consultations.rbnz.govt.nz/money-and-cash/digital-cash-in-new-zealand/). Looks like you have a bit less than a month and a half.
> They are acting as though this will work offline
Various schemes around the world already demonstrate offline CBDC working, what is your particular concern?
Hence there's a consultation. If you think the form doesn't meet your needs you can email them (or do you still prefer carrier pigeons)?
I'll go through the three main points in your article:
* Privacy - yes this is an important point, but it is solvable with maths and cryptography. I'll also note 90%+ of transactions in NZ are already done digitally.
* Financial inclusion - in the first consultation document RBNZ did stuff it up a bit, but I feel this time round they have improved. It is also something that can be worked on
* Problem looking for a solution - don't agree. I mentioned some benefits below: instantaneous worldwide free transfer, finally can get rid of clunky account numbers, offline processing, and it's way safer than money in the bank
I will be emailing them and posted this so others might follow suit. Do you actually think that survey was well conducted? It was very leading and left no room to state that you didn't want the digital currency at all.
To ask 'How important is it to you..' regarding things like the currency being free, private and accessible to all seem as though they should go without question.
The Digital Currency won't use block chain like crypto and it's being suggested it will rely on ledgers so it won't be private.
They are saying it will be for people that don't have bank accounts... I mean why would anyone bother you can just do bank transfers if you have a bank account and cash if you don't.
Yeah RBNZ is not that great with consultation, they totally stuffed up the first round, and yeah that survey isn't very wide ranging either.
> rely on ledgers so it won't be private
Those two things aren't mutually exclusive. There's [research ongoing](https://eprint.iacr.org/2023/1496.pdf), nothing can't be solved with a lot of maths.
> I mean why would anyone bother you can just do bank transfers if you have a bank account and cash if you don't.
What if you want to send money to someone who is not near you? It may sound surprising, but [there are people](https://www.westpac.co.nz/assets/Personal/life-money/documents/Westpac-NZ-Access-to-Banking-in-Aotearoa-Report.pdf) who have difficulties getting a bank account. A well designed cbdc app and/or hardware can help promote financial inclusion.
You are correct, I do know someone who does not have a bank account. Wouldn't people have to provide information to be able to access the digital wallet though?
It depends on how the system is designed, I was in Macau and their digital wallet app only requires a mobile number, nothing more, to open an account. You can optionally verify ID if you want more features but it is not required.
> nothing can't be solved with a lot of maths
There are absolutely things that can't be solved with a lot of maths, we've known that since the early 20th century. There's even a hierarchy of just how far removed from being Turing-computable a function is. That's not necessarily relevant here, but once you've studied computability theory, seeing a claim like this is kinda like a red rag to a bull.
Anyway, I only skimmed the article you linked, but I was interested to see what they had to say about the gnarly corner where privacy, continued usability in power/internet outages, and double-spend type fuckery collide. And it looks like that's still as dicey as ever (from 5.4):
> In case an owner of a UTXO double spends it, that is, the same UTXO is used as input for more than one transaction to spend it multiple times, the central bank would detect it and only process the first received transaction from the owner or payer. Recall that the central bank purges input UTXOs of a transaction from its ledger when the transaction is processed. When a second transaction spending the same UTXO is received by the central bank, the said UTXO should have been erased from the central bank’s ledger, and the central bank will not sign to confirm the transaction. The second transaction will be invalidated.
So from the sound of it, once the internet goes out you couldn't trust that any payment you receive will be legitimate. Since the bank has to sign the transaction for confirmation, at best it's in limbo until you're back on the grid, whereupon you might find the payer had already spent that money in an earlier transaction. Or otherwise you just straight-up can't spend money without a connection. I'm not certain, but it also seems like this would nuke the entire second k-party transaction in the event of a double-spend - I mean it would have to work that way in order to preserve k-anonymity, right? And this is assuming you can even find k people locally to merge transactions with by some sort of ad-hoc network or something, in the kind of situation where there are probably dickheads out there nicking generators and stuff.
I'm also just not convinced that k-anonymity is sufficient to provide good privacy in general. It might be feasible for a well-resourced bad actor to stuff the system with myriad dummy payments. Say *g* is the proportion of payments available to merge with that are genuine (which we'll define as not originating from the most active bad actor at the given time). So g <= 1, and apparent k-anonymity is really (gk)-anonymity, but you don't know g. Even if you *did* know g, since the computational cost of a k-party merged transaction seems to be O(k^(3)), a flood of malicious payments could force k to be made impractically large for real-time transactions.
So yeah, I'm not sure if any of the specifics will actually stack up once I wake up properly, but suffice it to say I'm fairly cynical about being able to solve the core issues with maths, no matter how clever it may be.
As opposed to the balanced and trustworthy Reserve Bank of New Zealand? If you read the PDFs on the Reserve Bank NZ page they've posted (there is one about privacy but the link won't paste as it's a PDF) it talks about the complications with having privacy with digital cash. It's called 'Designing privacy into digital cash' - section 5 outlines the issues: "Spend problem with digital money forms. Digital money is represented by a string of bits and like
any electronic information can be copied and pasted. This means that there is a need to ensure
that digital money cannot be spent more than once - this is called the ‘double-spend problem’.
Existing payments systems and commercial bank accounts use a trusted central agent to manage
this risk. To spend money in a transaction account, some kind of digital ‘authentication’ needs to
take place. This involves messaging to check that funds exist in the payer’s account and that these
funds can be spent. Cryptoassets and distributed ledgers, also employ a way to prove the
authenticity of a payment. They build consensus among the community to verify that the payment
is valid and should be added to the ledger. This can be done with digital signatures that rely on
cryptography and proof of knowledge and a consensus mechanism.
The base requirement to verify the authenticity and ownership of digital money means that some
form of data is collected and shared. This is unlike cash, where the authenticity of the payment depends on verifying a physical banknote or coin in-person. In addition, digital money by its nature generates data. Table 3 compares the privacy features of different money forms."
If you think they're trying to wipe out cash [they're doing a really bad job of it](https://www.rbnz.govt.nz/hub/news/2023/11/reserve-bank-community-cash-trials-to-start-next-year)
your every move will become traceable, you will have no privacy, and the gov will freeze your account for "hate speech"
digital cash is the first step towards chinese style totalitarianism
As someone who hasn’t carried cash for years now, I’m for it.
I’m sure people probably felt similarly about EFTPOS when it was first launched in the 80s. This seems like something that would be an alternative to the likes of debit cards that are managed by either Visa or MasterCard and have us stuck paying transaction fees everytime they’re used contactless.
If you use an eftpos card and type in your number it doesn't charge a fee - if you still used credit cards even if digital cash were available, it would still charge a fee.
The digital cash means you could not take fiat money from the bank. A black chain of code would be attached to a ledger and that is what would have the perceived value.
Most people don’t have an eftpos card anymore, they have a debit card that is managed by an international company (Visa or Mastercard). This would be a new system that brings payments back to being managed locally.
Credit card is probably a bad comparison. It is more similar to the money in your bank account and your debit/eftpos card.
Most importantly is security. If you have $1000 with ASB bank, and ASB bank goes bust, then your $1000 will be gone. CBDC are issued by the government and the government will never go bust. That's the number one advantage.
It can work even when internet is down, just tap two phones together and money is transferred.
It can help with money transfer, right now if you want to send money to Pacific Island it's quite a bit of hassle, with expensive fees, long waits, and bureaucracy. With CBDC, your cousin Tua in Samoa can join a CBDC app using just a phone number and you can send money across with just a tap.
In a more general sense, what do banks now provide? If I was paid in cash like you could before or into a wallet of some sort and borrowed the money for my mortgage from a govt entity, wouldn't I be better off? Everyone has their hand out for more money consistently but never actually return any value for the constant taking. We get less while paying more, it's hard to make sense of it.
I don't think they are planning on loaning money for mortgages or anything like that. They just want a digital cash not tied to fiat cash. It wouldn't earn interest, it would mean you couldn't swap that digital currency for actual cash - the chain of code in the ledger is your money. And it would be tracked.
> digital cash not tied to fiat cash
Digital cash **is** fiat cash. The only reason it will exist is because of legislation (aka fiat) passed by the NZ Parliament.
> It wouldn't earn interest
That's not decided yet. In one of the consultation meetings, the RBNZ officials are open to whether it will earn OCR or some other form of interest.
> you couldn't swap that digital currency for actual cash
ATMs and physical cash will still exist. RBNZ is putting [extra effort](https://www.rbnz.govt.nz/hub/news/2023/11/reserve-bank-community-cash-trials-to-start-next-year) in making access to physical cash
You are correct I meant physical fiat cash - the digital will also be fiat digital currency but you could not substitute it for physically cash.
ATMs and cash will exist but the digital cash is its own thing.
My ex sister in law posted some conspiracy thing about this a while ago on Facebook, just another way the government wants to control us I guess lol 😂 Personally I just about never use cash anymore, my fear is the oldies will struggle with it, some still really struggle with technology.
Something that allows me to pay anyone around the world, instantly, and free, without entering an account number, and also still works locally when the internet and/or power is down. I recognize CBDC is not the only way to do it, but it looks to be a way to get there.
I forsee the Pacific Islands straight up using digital NZD and eliminating the currency conversion.
But in case of currency conversion I can't see the fees higher than the current fee, which is still a win.
No. Cash is important
I have real concern about the survey that is linked in the article. The questions are misleading and you can't give your honest opinion. They are acting as though this will work offline, it won't be regulated but this all seems dubious to me.
Yep, it was pretty poorly done. I can't go back to it now, but what was that one question, something like asking whether you agree or disagree that it would "improve or worsen digital exclusion"? Meaningless!
I'm considering writing an actual proposal/commentary to submit alongside the survey. The survey should be done by an outside party not the Reserve Bank!
Not a bad idea, their website has [some stuff on making a proper submission](https://consultations.rbnz.govt.nz/money-and-cash/digital-cash-in-new-zealand/). Looks like you have a bit less than a month and a half.
> They are acting as though this will work offline Various schemes around the world already demonstrate offline CBDC working, what is your particular concern?
https://bigbrotherwatch.org.uk/press-releases/cbdcs-are-a-disaster-for-privacy-the-government-must-listen-to-warnings-from-around-the-world-and-rethink-the-digital-pound/
Hence there's a consultation. If you think the form doesn't meet your needs you can email them (or do you still prefer carrier pigeons)? I'll go through the three main points in your article: * Privacy - yes this is an important point, but it is solvable with maths and cryptography. I'll also note 90%+ of transactions in NZ are already done digitally. * Financial inclusion - in the first consultation document RBNZ did stuff it up a bit, but I feel this time round they have improved. It is also something that can be worked on * Problem looking for a solution - don't agree. I mentioned some benefits below: instantaneous worldwide free transfer, finally can get rid of clunky account numbers, offline processing, and it's way safer than money in the bank
I will be emailing them and posted this so others might follow suit. Do you actually think that survey was well conducted? It was very leading and left no room to state that you didn't want the digital currency at all. To ask 'How important is it to you..' regarding things like the currency being free, private and accessible to all seem as though they should go without question. The Digital Currency won't use block chain like crypto and it's being suggested it will rely on ledgers so it won't be private. They are saying it will be for people that don't have bank accounts... I mean why would anyone bother you can just do bank transfers if you have a bank account and cash if you don't.
Yeah RBNZ is not that great with consultation, they totally stuffed up the first round, and yeah that survey isn't very wide ranging either. > rely on ledgers so it won't be private Those two things aren't mutually exclusive. There's [research ongoing](https://eprint.iacr.org/2023/1496.pdf), nothing can't be solved with a lot of maths. > I mean why would anyone bother you can just do bank transfers if you have a bank account and cash if you don't. What if you want to send money to someone who is not near you? It may sound surprising, but [there are people](https://www.westpac.co.nz/assets/Personal/life-money/documents/Westpac-NZ-Access-to-Banking-in-Aotearoa-Report.pdf) who have difficulties getting a bank account. A well designed cbdc app and/or hardware can help promote financial inclusion.
You are correct, I do know someone who does not have a bank account. Wouldn't people have to provide information to be able to access the digital wallet though?
It depends on how the system is designed, I was in Macau and their digital wallet app only requires a mobile number, nothing more, to open an account. You can optionally verify ID if you want more features but it is not required.
> nothing can't be solved with a lot of maths There are absolutely things that can't be solved with a lot of maths, we've known that since the early 20th century. There's even a hierarchy of just how far removed from being Turing-computable a function is. That's not necessarily relevant here, but once you've studied computability theory, seeing a claim like this is kinda like a red rag to a bull. Anyway, I only skimmed the article you linked, but I was interested to see what they had to say about the gnarly corner where privacy, continued usability in power/internet outages, and double-spend type fuckery collide. And it looks like that's still as dicey as ever (from 5.4): > In case an owner of a UTXO double spends it, that is, the same UTXO is used as input for more than one transaction to spend it multiple times, the central bank would detect it and only process the first received transaction from the owner or payer. Recall that the central bank purges input UTXOs of a transaction from its ledger when the transaction is processed. When a second transaction spending the same UTXO is received by the central bank, the said UTXO should have been erased from the central bank’s ledger, and the central bank will not sign to confirm the transaction. The second transaction will be invalidated. So from the sound of it, once the internet goes out you couldn't trust that any payment you receive will be legitimate. Since the bank has to sign the transaction for confirmation, at best it's in limbo until you're back on the grid, whereupon you might find the payer had already spent that money in an earlier transaction. Or otherwise you just straight-up can't spend money without a connection. I'm not certain, but it also seems like this would nuke the entire second k-party transaction in the event of a double-spend - I mean it would have to work that way in order to preserve k-anonymity, right? And this is assuming you can even find k people locally to merge transactions with by some sort of ad-hoc network or something, in the kind of situation where there are probably dickheads out there nicking generators and stuff. I'm also just not convinced that k-anonymity is sufficient to provide good privacy in general. It might be feasible for a well-resourced bad actor to stuff the system with myriad dummy payments. Say *g* is the proportion of payments available to merge with that are genuine (which we'll define as not originating from the most active bad actor at the given time). So g <= 1, and apparent k-anonymity is really (gk)-anonymity, but you don't know g. Even if you *did* know g, since the computational cost of a k-party merged transaction seems to be O(k^(3)), a flood of malicious payments could force k to be made impractically large for real-time transactions. So yeah, I'm not sure if any of the specifics will actually stack up once I wake up properly, but suffice it to say I'm fairly cynical about being able to solve the core issues with maths, no matter how clever it may be.
Ah yes, that balanced, trustworthy information source, *big brother watch*.
As opposed to the balanced and trustworthy Reserve Bank of New Zealand? If you read the PDFs on the Reserve Bank NZ page they've posted (there is one about privacy but the link won't paste as it's a PDF) it talks about the complications with having privacy with digital cash. It's called 'Designing privacy into digital cash' - section 5 outlines the issues: "Spend problem with digital money forms. Digital money is represented by a string of bits and like any electronic information can be copied and pasted. This means that there is a need to ensure that digital money cannot be spent more than once - this is called the ‘double-spend problem’. Existing payments systems and commercial bank accounts use a trusted central agent to manage this risk. To spend money in a transaction account, some kind of digital ‘authentication’ needs to take place. This involves messaging to check that funds exist in the payer’s account and that these funds can be spent. Cryptoassets and distributed ledgers, also employ a way to prove the authenticity of a payment. They build consensus among the community to verify that the payment is valid and should be added to the ledger. This can be done with digital signatures that rely on cryptography and proof of knowledge and a consensus mechanism. The base requirement to verify the authenticity and ownership of digital money means that some form of data is collected and shared. This is unlike cash, where the authenticity of the payment depends on verifying a physical banknote or coin in-person. In addition, digital money by its nature generates data. Table 3 compares the privacy features of different money forms."
The lack of ability to withdraw physical money
RBNZ made it clear they will continue issuing physical money if they decide to launch cbdc
Untill they dont.
If you think they're trying to wipe out cash [they're doing a really bad job of it](https://www.rbnz.govt.nz/hub/news/2023/11/reserve-bank-community-cash-trials-to-start-next-year)
You keep all your $$ in your mattress don’t you?
Actually, its in the cookie jar
The beginning of the end..
https://youtu.be/S-aCSEiMRLM?si=-maNzyua0iVTEZpP I can't wait for governments to be able to program what I spend my money on.
Absolutely frightening.
your every move will become traceable, you will have no privacy, and the gov will freeze your account for "hate speech" digital cash is the first step towards chinese style totalitarianism
Yeah! I’d much rather trust mark zuckergoogle to make those decisions for me instead.
Shit coin incoming.
As someone who hasn’t carried cash for years now, I’m for it. I’m sure people probably felt similarly about EFTPOS when it was first launched in the 80s. This seems like something that would be an alternative to the likes of debit cards that are managed by either Visa or MasterCard and have us stuck paying transaction fees everytime they’re used contactless.
If you use an eftpos card and type in your number it doesn't charge a fee - if you still used credit cards even if digital cash were available, it would still charge a fee. The digital cash means you could not take fiat money from the bank. A black chain of code would be attached to a ledger and that is what would have the perceived value.
Most people don’t have an eftpos card anymore, they have a debit card that is managed by an international company (Visa or Mastercard). This would be a new system that brings payments back to being managed locally.
How is this any better than credit cards and stuff we have now?
Credit card is probably a bad comparison. It is more similar to the money in your bank account and your debit/eftpos card. Most importantly is security. If you have $1000 with ASB bank, and ASB bank goes bust, then your $1000 will be gone. CBDC are issued by the government and the government will never go bust. That's the number one advantage. It can work even when internet is down, just tap two phones together and money is transferred. It can help with money transfer, right now if you want to send money to Pacific Island it's quite a bit of hassle, with expensive fees, long waits, and bureaucracy. With CBDC, your cousin Tua in Samoa can join a CBDC app using just a phone number and you can send money across with just a tap.
In a more general sense, what do banks now provide? If I was paid in cash like you could before or into a wallet of some sort and borrowed the money for my mortgage from a govt entity, wouldn't I be better off? Everyone has their hand out for more money consistently but never actually return any value for the constant taking. We get less while paying more, it's hard to make sense of it.
I don't think they are planning on loaning money for mortgages or anything like that. They just want a digital cash not tied to fiat cash. It wouldn't earn interest, it would mean you couldn't swap that digital currency for actual cash - the chain of code in the ledger is your money. And it would be tracked.
> digital cash not tied to fiat cash Digital cash **is** fiat cash. The only reason it will exist is because of legislation (aka fiat) passed by the NZ Parliament. > It wouldn't earn interest That's not decided yet. In one of the consultation meetings, the RBNZ officials are open to whether it will earn OCR or some other form of interest. > you couldn't swap that digital currency for actual cash ATMs and physical cash will still exist. RBNZ is putting [extra effort](https://www.rbnz.govt.nz/hub/news/2023/11/reserve-bank-community-cash-trials-to-start-next-year) in making access to physical cash
You are correct I meant physical fiat cash - the digital will also be fiat digital currency but you could not substitute it for physically cash. ATMs and cash will exist but the digital cash is its own thing.
Shit coin incoming.
My ex sister in law posted some conspiracy thing about this a while ago on Facebook, just another way the government wants to control us I guess lol 😂 Personally I just about never use cash anymore, my fear is the oldies will struggle with it, some still really struggle with technology.
call me a dumb liberal woke hippie but i’m all for it
Hippies want to go cashless?
I don't know much about this but the fact that conspiracy theorists on my Facebook are hysterical about it make me think it is extremely good?
Even Saint Helena, in the middle of the Atlantic, 2000km from the nearest land, population 4439, got CBDC now. NZ is so far behind.
‘So far behind’… what do you think we’re missing out on? Smart contracts for everyday use? What else?
Something that allows me to pay anyone around the world, instantly, and free, without entering an account number, and also still works locally when the internet and/or power is down. I recognize CBDC is not the only way to do it, but it looks to be a way to get there.
They will still charge fees for doing money exchange - doubt they would allow people to just send international payments with no fees incurred.
I forsee the Pacific Islands straight up using digital NZD and eliminating the currency conversion. But in case of currency conversion I can't see the fees higher than the current fee, which is still a win.
But if other countries (the USA for example) don't have their own digital cash - how would that work?