• New Zealand’s Reserve Bank has indicated that it has no plans to propose a regulatory approach towards cryptocurrencies and stablecoins, but has recommended increased vigilance.
• The central bank came to this conclusion after receiving 50 submissions from different stakeholders as part of its consultation process that began in December 2022.
• The RBNZ also discussed the potential use of crypto-assets as money, and stated its latest position on central bank digital currency (CBDC).
New Zealand Is Not Exploring Crypto Regulation
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.
Consultation Process
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.
Cautious Approach Needed
“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.”
Central Bank Digital Currency
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 have noted potential benefits from CBDCs for payments system efficiency, financial inclusion and monetary policy effectiveness…we believe more work needs to be done before any decision can be made regarding whether introducing such instruments would be appropriate for New Zealand,” it said in its statement.
Conclusion
In conclusion, while New Zealand does not plan to explore any new regulations on cryptocurrencies or stablecoins at this time, they are still recommending increased vigilance when dealing with these assets due to their potentially risky nature. Additionally they have explored CBDCs in their research but believe further examination is needed before any decisions can be made about introducing them into New Zealand’s economy.