Key Takeaways
- RBNZ Director stated that the bank does not believe a regulatory approach is necessary now but recognizes the importance of heightened vigilance
- The country’s Financial Markets Authority (FMA) currently oversees crypto regulation.
New Zealand’s central bank, the Reserve Bank of New Zealand (RBNZ), has announced that it will increase its monitoring of stablecoins and crypto assets in response to uncertainties surrounding the development of the sector and the potential risks it may pose to the country’s financial system.
The decision comes after the RBNZ received feedback from various stakeholders, including BlockchainNZ, Ripple, and major banks like Westpac and the Bank of New Zealand.
Ian Woolford, the RBNZ’s Director of Money and Cash, stated that while the bank does not believe a regulatory approach is necessary at present, it recognizes the importance of heightened vigilance. Woolford emphasized the need for caution and the collection of enhanced data to develop a better understanding of the potential implications of stablecoins and private digital currencies on the financial system and monetary sovereignty.
“We agree that caution is needed, which also reinforces the need for enhanced data and monitoring to build understanding,” Woolford’s statement reads. The RBNZ appears to be observing how other jurisdictions handle crypto regulation before taking its own measures. Woolford highlighted the significance of global harmonization in ensuring effective regulation and suggested that overseas regimes’ implementation could provide clarity and best practices for New Zealand.
He went on to emphasize that consumer and investor protections, along with regulatory barriers to entry, do matter if the country wants to create a “reliable and efficient money and payment system.” The country’s Financial Markets Authority (FMA) currently oversees the regulation of all financial activities, including cryptocurrencies.
Although New Zealand maintains a relatively neutral stance toward digital currencies, it has implemented measures to ensure appropriate regulation, such as considering cryptocurrencies as a form of property subject to income tax.
Giving wings to New Zealand’s crypto adoption dreams, last year, Binance-the world’s largest crypto exchange, set up shop in the island country. However, with only a population of roughly 5.1 million, New Zealand is a smaller market than its neighbor Australia, where approximately 4.2 million people own crypto.
