The Reserve Bank of New Zealand (RBNZ) is considering releasing a digital version of the NZ dollar after recording a steady decline in cash use across the country.

The RBNZ has started a multi-stage journey to explore the potential issuance of a Central Bank Digital Currency.

The long-term plan consists of four stages and the RBNZ is currently in the second stage, which focuses on crafting a design for the new currency.

As the digital currency must align with New Zealand’s specific needs and economic environment, the RBNZ is seeking public input through a comprehensive consultation process.

The central bank has released a detailed consultation paper that outlines the potential benefits of the currency, such as faster transaction processing, increased accessibility, and enhanced security.

There are also some challenges and concerns, including the sluggishness of adopting digital asset technologies, the RBNZ added.

The consultation period for the potential digital currency will run until July 26.