New Zealand central bank says crypto regulation not needed now.
The central bank of New Zealand is increasing its monitoring of stablecoins and crypto-assets after receiving public submissions, but it has not yet called for a regulatory approach.
In a statement on June 30, Ian Woolford, the director of money and cash at the Reserve Bank of New Zealand (RBNZ), stated that the RBNZ agrees that “a regulatory approach isn’t needed right now, but increased vigilance is.”
Accompanying Woolford’s statement was a summary of 50 stakeholder submissions to a previous RBNZ paper discussing crypto and decentralized finance.
New forms of money such as crypto and stablecoins create opportunities and risks for New Zealanders and the financial system. Have your say now on these and how we should respond: https://t.co/RE9j0ryjVk #rbnz pic.twitter.com/yvcR2tjd9y
— Reserve Bank of NZ (@ReserveBankofNZ) February 10, 2023
The respondents included the country’s crypto advocacy body, BlockchainNZ, tech company Ripple, as well as banks such as Westpac and the Bank of New Zealand.
Woolford stated that the submissions demonstrated that crypto had “significant risks and opportunities,” along with “uncertainties” about the sector’s development, which necessitated extra attention:
“We agree that caution is needed, which also reinforces the need for enhanced data and monitoring to build understanding.”
The RBNZ appears to be waiting to see how other jurisdictions will regulate crypto before making its own moves.
“Global harmonization is crucial to ensure effective regulation,” said Woolford. He added that best practices may become clearer as overseas regimes are implemented.
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A Chainalysis report in 2022 ranked New Zealand 108th out of 146 in its 2022 Global Crypto Adoption Index, just behind Austria and ahead of Azerbaijan.
New Zealand’s current laws consider crypto as a form of property. Digital assets are subject to various non-crypto-specific financial, money laundering, and tax regulations that generally apply.
“Issues raised by cryptoassets and other innovations do not neatly fit within agency boundaries,” said Woolford.
He added that consumer and investor protections, as well as regulatory barriers to entry, are important if the country wants to create a “reliable and efficient money and payment system.”
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