The Reserve Bank of New Zealand’s (RBNZ) growing role in shaping the country’s future payment infrastructure has caught the eye of researcher Jodie Bruning, who warns that important constitutional and democratic questions are being overlooked.
Bruning, lead researcher at Physicians and Scientists for Global Responsibility, said the RBNZ has shifted its focus from central bank digital currencies (CBDCs) towards modernising retail payment systems and developing real-time payments.
The distinction is significant because the infrastructure could provide a “rail” for a future CBDC, despite the RBNZ publicly focusing on real-time payments and referring to digital cash rather than CBDCs, she said.
Bruning argued decisions about who controls critical national digital infrastructure are fundamentally political and should be made by Parliament, rather than a central bank.
She was particularly concerned about integrating payment systems with other digital infrastructure, including information and digital identity systems.
Bruning pointed to India’s digital public infrastructure as an example of potential risks from linking digital identity, payments and data-sharing systems. She said international research has raised concerns about privacy, state surveillance, data expropriation and insufficient safeguards.
She also questioned if the RBNZ’s consultation adequately addressed these issues, criticising the bank for not providing Kiwis with alternatives to compare. Bruning said the consultation focused heavily on payment functionality and modernisation without examining constitutional safeguards, institutional separation or the long-term concentration of power.
She has called for a broader legislative framework for digital public infrastructure, with clear limits and protections established by Parliament.
Bruning said the debate should concentrate on efficiency, technical capability, but also who controls the infrastructure and what protections exist for citizens.
Listen or watch RCR’s interview with Jodie Bruning and read her full analysis of New Zealand’s emerging digital public infrastructure at PSGR.
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