Hybrid-Central Bank Digital Currency
The HCBDC is a completely new Currency System that is backed 100%, by an internationally tradable material held as reserve stock. It can be used by companies and institutions trading in international commodities, as replacement for having to hold vast amounts of foreign currencies and exchange hedging funds. It also eliminates the associated expensive transaction costs. It brings a simple but stable solution to a volatile market.
The HCBDC goes through a rigorous assessment before it is authorized. The Reserve Bank's assessment and approval procedures ensure compatibility and compliance with their current systems and regulations and alignment with future plans around digital currencies. The financial and academic gremia assess the market compatibility and overall soundness of this product.
The Central Bank has developed some views suggestions and a policy making toolkit about the future of the digital currency phenomenon, published in January of 2020. We identified the following key points that are necessary to create a completely new currency system and make a fresh start:
With this information in hand we took a fresh look at all the Digital and standard currencies and banking practices.The new Hybrid Digital Currency turned out to be the best possible system that can provide the best solution going forward.
The new Hybrid-Central Bank Digital Currency allows for the best of both: Centralized reserve stock options held by the Central Bank and Decentralized reserve stock held here in New Zealand.
It is a simple system that can be implemented quickly. It has a number of retail and wholesale options to suit a variety of customers.
The issuer of the currency ensures that the quality of the Reserve Stock is met, that it can be verified independently and, that suitable stock levels are maintained.