New Zealand Is Not Exploring Crypto Regulation, but Recommends Increased Vigilance

The Reserve Bank of New Zealand (RBNZ) has said it won't propose a regulatory approach towards stablecoins and cryptocurrencies, but would recommend increased vigilance, the central bank announced on Friday.

“Issues raised by crypto-assets and other innovations do not fall neatly within agency boundaries," said Ian Woolford, Director of Money and Cash, RBNZ. "However, issues such as consumer and investor protection or potential commercial or regulatory barriers to entry do matter ...."

The island nation's central bank came to the conclusion after receiving 50 submissions from different stakeholders as part of a consultative process that it started in December 2022. It had sought submissions about an Issues Paper on Private Innovation that discussed the development of the crypto-asset market.

"The submissions reinforced our view that there are significant risks and opportunities, but also significant uncertainties about how the sector will develop and where the optimal balance will lie," the announcement said. "We agree with the view that caution is needed. This is why we are not proposing a regulatory response at this point."

While the focus of the process was on the potential uses of crypto-assets as money, the RBNZ indicated its latest position on central bank digital currency (CBDC).

"While we are exploring a potential CBDC, we have not made any decision about the need for one," the announcement said. "If we do introduce a CBDC, this would not be to displace cash which would remain available."

New Zealand has seen Binance register as a financial service provider but Huobi ended derivatives trading services to the nation.