Crypto ‘regulatory approach not needed now’ Central Bank of New Zealand

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New Zealand’s central bank is stepping up its oversight of stablecoins and cryptoassets following public submissions, but refrained from calling for a regulatory approach.

Ian Woolford, director of money and treasury at the Reserve Bank of New Zealand, said in a June 30 statement that the RBNZ agrees that a regulatory approach is not needed at this time, but that heightened vigilance is.

Woolfords’ statement was accompanied by a summary of 50 stakeholder submissions to an earlier RBNZ paper discussing crypto and decentralized finance.

Respondents included the country’s crypto advocacy body BlockchainNZ, technology company Ripple, as well as banks such as Westpac and Bank of New Zealand.

Woolford said the submissions showed that crypto presented significant risks and opportunities, as well as uncertainties in the development of the sectors, which earned him additional attention:

We agree that caution is warranted, which also reinforces the need for better data and monitoring to build understanding.

The RBNZ is apparently waiting to see how other jurisdictions will regulate crypto before taking its own action.

Global harmonization is crucial to ensure effective regulation, Woolford said. He added that best practices may become clearer as foreign regimes are implemented.

Related: Unfazed by SEC Uproar, Top Banks Strive to Make Blockchain Interoperable

A Chainalysis report in 2022 ranked New Zealand 108 out of 146 in its 2022 Global Crypto Adoption Index, just behind Austria and ahead of Azerbaijan.

The index ranks all countries by “popular adoption of cryptocurrency”. Source: Chain Analysis

Current New Zealand laws consider cryptography a form of property. Digital assets are governed by various non-crypto-specific financial, anti-money laundering, and tax regulations that generally apply.

The issues raised by crypto-assets and other innovations do not fall squarely within the boundaries of the agency,” Woolford said.

He added that consumer and investor protection, as well as regulatory barriers to entry, are important if the country is to create a reliable and efficient monetary and payment system.

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