Debanked?

And that’s how it necessarily starts - small steps with traditional instruments transacting on new de-centralised platforms as a hybrid model. Which might be the worst of both worlds or the best of both worlds, depending on your perspective.

But it will evolve. The EU just agreed some ground-breaking new legislation on this that will accelerate De-Fi adoption by the mainstream institutions.

Off topic but fits in the banking world.

The Govt wants to pass legislation on how much a private or investor can borrow. Might have this wrong but if I can only borrow 6 x my income then in reality the max price house I could purchase would be 650k + deposit.So will this kill the housing market and those looking to make a quick buck??

Borrowing money based on multiple of income is the most basic & obvious mechanism to keep things sustainable.

It’s been the method used in the UK for decades. When I was buying my first house in England all the main banks offered in the range 3-4 x household income. If your income was super-high then they sometime allowed a bit higher x multiple. But for 90% population it was 3-4x salary up to 90% of house value -meaning you needed min. 10% deposit.

I could not believe the insane difference when I first came to NZ and was offered 5-6x my salary for a mortgage. Yes it was tempting to snap up a dream big house but I realised it was also utterly insane.

The only thing I’m astonished about is that it’s taken NZ so long to realise this.

That bit about transferring the current mortgage and the new DTI's not applying was from the interest.co.nz website article announcing and explaining the new rules.
Whether or not your bank will do that is a separate question.
Personally I was surprised, cause generally if anything changes, like anything, the bank wants re-assess EVERYTHING with you again, as per your example.

Sometimes glacial change seems like a good thing.

They come out with some funny quotes though.

"The money won’t be programmable, in the sense that the Reserve Bank won’t have any constraints on how the money would be used and the Reserve Bank won’t collect any transaction data or even information about the individuals.

www.interest.co.nz/currencies/127995/reserve-bank-could-have-fairly-lengthy-selling-job-build-public-understanding-and#comments


NZ 'lagging'



Woolford noted New Zealand is "lagging" in its core payments systems.



While payments through the banks by individuals might take an hour, for example, the fast payments systems employed overseas are "near instantaneous."



"The New Zealand system is we would say 10-20 years behind other developed countries."



Woolford stressed the aim was not to replace cash, but to give choice and spur innovation in the private sector, "because we are seeing a lack of innovation in payments and product offerings" at the moment.



A CBDC would also pick up on the role of the current physical NZ dollar by acting "as a value anchor".



"The Reserve Bank wouldn’t engage directly with individuals," Woolford said.



"They [the public] would access the digital dollar either via their bank or some other financial institution that isn’t a bank. This will open up service providers offering different products for example.



"Payments could be made a point of sale. You could do it in a peer-to-peer way - outside of the banking system. It will be available offline. And it will be instant.



"The money won’t be programmable, in the sense that the Reserve Bank won’t have any constraints on how the money would be used and the Reserve Bank won’t collect any transaction data or even information about the individuals.



"Our relationship will be with the third party providers, so privacy is an important dimension of what we are talking about here."



Woolford said he understood the concern that people often have about the Government tracking the money.



"That is not the objective of this, with this form of digital cash - and indeed, we would like to see greater protections on the third party use of data than they would have for their own purposes.



"Whether or not you as an individual choose to use a digital form of cash in a sense doesn’t matter. If you benefit because digital cash has acted as a spur to innovation, which we think it will, then you will benefit directly," Woolford said.



He said the progress on open banking "has been glacial".



"So, you are seeing a lack of innovation from the New Zealand banking system - a lack of competition. Central bank digital currency will be competition in and of itself, because people will have choice, you can choose to use your bank or you can choose to use this other product."



Fintech 'going to need to be regulated'



Woolford said in talking about third party providers of the CBDC, "it really is the fintech sector that we are thinking about".



"For that to work they are going to need to be regulated and there’s got to be trust and confidence in them as well," Woolford said.



"That innovation has to come from somewhere. It’s not coming from the banking system. It will eventually but it will take a long time.



"We think that the innovation can come from the fintech sector but people do have to have trust and confidence so there will need to be some form of regulation."



The committee members expressed enthusiasm for having the RBNZ back to report further on its CBDC progress at a later date.