RBNZ: Cryptocurrencies 'Do Not Need Regulation Right Now'

Author: JESSE COGHLAN, COINTELEGRAPH; Compiler: Songxue, Jinse Finance

The Reserve Bank of New Zealand is stepping up monitoring of stablecoins and crypto assets following a public submission, but stopped short of calling for regulatory action.

In a statement on June 30, Ian Woolford, the RBNZ’s director of currency and cash, said the RBNZ agreed that “regulatory action is not required at this time, but greater vigilance is required”.

Woolford’s statement was accompanied by an abstract from 50 stakeholder submissions to the Reserve Bank of New Zealand (RBNZ) of a paper discussing crypto and decentralized finance.

Respondents included the country’s cryptocurrency advocacy body BlockchainNZ, technology company Ripple, and Westpac and Bank of New Zealand, among others.

Woolford said the submissions revealed “significant risks and opportunities” for cryptocurrencies and “uncertainty” about the industry’s development, making it warrant additional 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 regulate cryptocurrencies before taking action.

“Global harmonization is essential to ensure effective regulation,” Woolford added, adding that best regulatory practice may become clearer as overseas regimes are implemented.

The 2022 Chainalysis report ranks New Zealand 108th out of 146 countries in the 2022 Global Cryptocurrency Adoption Index, just behind Austria and ahead of Azerbaijan.

The index ranks all countries based on “grassroots cryptocurrency adoption.” Source: Chainalysis

Current New Zealand law considers cryptocurrencies a form of property. Digital assets are subject to various non-cryptocurrency-specific financial, money laundering, and tax regulations of general application.

“The issues raised by crypto assets and other innovations are not entirely within the purview of institutions,” Woolford said.

Consumer and investor protection, as well as regulatory barriers to entry, do matter if the country wants to create a “reliable and efficient currency and payment system,” he added.