New Zealand not quick to implement crypto regulatory policies

New Zealand’s central bank is trying to exercise caution in taking a regulatory approach towards crypto and stablecoins, stating that the government is monitoring the development of crypto regulations globally.

The Reserve Bank of New Zealand’s (RBNZ) Director of Money and Cash, Ian Woolford, released a statement on June 30, based on the summary of submissions from 50 stakeholders. It stated that while risks are associated with cryptocurrency and stablecoins, there were uncertainties around the growth trajectory of the burgeoning asset class globally.

Woolford stated part of the submissions believed it was essential to regulate the sector to protect investors from scams and implosions. Still, most submitters called for a more flexible regulatory approach that would encourage innovation. Woolford states, “We agree that caution is needed, reinforcing the need for enhanced data and monitoring to build understanding.”

The RBNZ began a consultation period between December 2022 and April 2023, seeking feedback on the bank’s issues paper on crypto and the benefits and challenges posed by the sector. Some responders were from the crypto industry, including BlockchainNZ, Ripple, and EasyCrypto. 

Meanwhile, Woolford said the RBNZ is monitoring crypto regulatory developments in similar jurisdictions and across the globe before deciding to roll out its crypto regulations. 

“We also agree that global harmonization is crucial to ensure effective regulation. As overseas regimes are implemented, best practice may become clearer. Implementation of other regulatory regimes, such as the Financial Market Infrastructure Act could also have an impact on the cryptoassets market.”

Ian Woolford, Reserve Bank of New Zealand

More governments have been working towards regulating the cryptocurrency sector. The central banks of the United Arab Emirates (UAE), and Hong Kong are making collaborative efforts to introduce crypto regulations. Norway’s apex bank also called for tailored crypto policies. 

However, the fragmented regulatory framework in the United States has been an issue for cryptocurrency businesses, with firms seeking clear guidelines for the digital asset industry. The Securities and Exchange Commission (SEC) has been accused of adopting an aggressive approach towards the industry, with its recent lawsuits against two of the industry’s biggest crypto exchanges, Binance and Coinbase.