Power Finance, a finance company in New Zealand, plans to release what is called the world’s first digital version of the New Zealand dollar. Scheduled to launch early next year, the digital currency will use distributed general ledger technology.
However, Power Dollar is not supported by the government and looks more like a stable currency like Tether than a real digital dollar. It is privately generated and will be maintained at a one-to-one NZ dollar exchange rate held by Inland Revenue through the tax collection system.
The company is led by Dave Corbett, a former banking and capital market partner at PricewaterhouseCoopers, backed by the British investment company Centrality Ventures and others.
By using DLT together with smart identification technology, the identities of all coin holders are verified and transactions are registered, which helps prevent money laundering and fraud. Corbett said the new currency was designed to work within existing regulations and added:
“I see the reserve bank every other week. It is fair to say that they supported what we did, but we made an effort for the bank’s future. ”
In response to Corbett’s claim that the digital dollar is “state-subsidized”, the Reserve Bank of New Zealand or the Reserve Bank of New Zealand, as well as IR, say they are not cooperating with the company. A spokeswoman for Inland Revenue said that International Relations is not responsible for regulating financial companies, adding:
Inland Revenue is not a partner of Power Finance in this matter, and we do not agree that this is “government supported”.
Following the launch of the coin, Corbett said the company would receive a banking license from the Reserve Bank of New Zealand and, if successful, would begin registering “partners” to launch banking-style services operating outside the traditional banking system.
“Our plan is to attach this [banking] license to the platform, which means our partners will be technically capable of behaving like banks,” he said, adding that the currency could set an important precedent for the Reserve of New Zealand. :
“This is really a great way to experiment on a large scale in New Zealand, and it could be something that could ask RBNZ to go further and create its own digital currency.”
Central banks around the world are examining digital currencies, and the Reserve Bank of New Zealand has its own agenda aimed at the future of the country’s monetary system.
New Zealand has been positive about the use of blockchain and cryptocurrency since 2014, when the Reserve Bank of New Zealand named Bitcoin a real competitor to cash. This small country recently became one of the first to legalize Bitcoin as a form of income in July 2019. In February this year, the country’s tax authorities proposed to exempt cryptocurrencies from certain taxes to stimulate growth.