Most New Zealanders are still keen on using physical cash, a Reserve Bank consultation has found.

The recent call for feedback on digital cash drew the highest response the bank has received, a statement from the bank said.

The responses showed large numbers of people remained committed to physical currency.

"Kiwis say cash is crucial and current payment options are not delivering what customers want," the bank said.

The Reserve Bank has been exploring a proposal to make cash available in a digital format.

Digital currency would be issued by the Reserve Bank and hold the same value as the traditional banknotes and coins also issued by the central bank.

It would likely be accessed by either a physical card, digital wallet, or a phone app.

The Reserve Bank was working through a process to gauge whether the country was ready to move to using a digital currency – although it said a central digital currency wouldn't replace cash.

The bank's consultation process drew written submissions from more than 500 individuals and groups, while more than 18,000 responses were submitted via an online survey.

"The Reserve Bank is committed to ensuring New Zealanders can continue to access, use, and bank cash as they need or prefer. This consultation reinforced that cash is crucial for Kiwis."

Ian Woolford, the bank's director of money and cash, revealed: "84% of respondents were worried about losing access to banknotes and coins (physical cash) and want assurance that cash will still be issued by the Reserve Bank and not reduced or replaced by digital cash.

"We'll keep issuing cash for as long as New Zealanders want to use it. We're doing a lot of work to redesign the cash system," he said.

The consultation process also highlighted New Zealanders' "big concerns" about privacy and control, the bank said.

"The Reserve Bank respects and agrees with this. Digital cash will be designed to be private," Woolford said. "The Reserve Bank doesn’t care if you spend your money – physical or digital – on meat pies and lattes but does care if it is used to fund terrorism, for organised crime or money laundering."

The Reserve Bank said it was "concerned about the limited choices New Zealanders have to pay, and the lack of competition and innovation in our money and payments markets".

"The proposal to make cash available in a digital format is so people can get the combined benefits of both cash and digital payments in one product that is fast, direct, offline and secure," the bank's statement said.

Woolford added that many other countries were exploring digital currency.

"Money issued by central banks can play a crucial role in underpinning a reliable, efficient, competitive, innovative and inclusive financial system. We're exploring Digital Cash to ensure future generations of New Zealanders experience these benefits," he said.

Ultimately, the bank would work with the government to decide whether to introduce digital cash. It would be introduced in 2030 at the earliest, the bank said.

"The digital cash proposal is a multi-year exploration and there will be further opportunities for public input. The next stages include further engagement, design and technical work, policy development and a cost-benefit analysis during 2025 and 2026.

"People also told us they want fast, direct, offline and secure ways to pay with low fees but today they only have these choices with banknotes and coins. People wanted features like the ability to make offline payments in an emergency (63%), real-time payments (60%), and it be free to use (60%).

"We have more work to do. Businesses, fintechs, financial service providers, and others like charities were supportive of our reasons to explore digital cash but some of these sentiments weren’t shared by members of the public responding to the survey."