New Zealand’s RBNZ Will Strengthen Unregulated Crypto Surveillance

Key Points:

• RBNZ intensifies supervision of stablecoins and crypto assets.
• A regulatory approach is not needed now, but vigilance is required, according to the bank.
• The bank monitors global regulations and studies CBDC implementation.

The Reserve Bank of New Zealand (RBNZ) said on Friday that it is intensifying its supervision of stablecoins and crypto assets owing to uncertainty about how the industry will evolve and the potential dangers they may pose to the financial system.

The decision was made after the central bank received public feedback to better understand the possible ramifications of new forms of private money on both the financial system and monetary sovereignty. Ian Woolford, RBNZ’s money and cash director, said that the bank agreed with the majority of submitters that a regulated approach was not required at this time but that heightened vigilance was necessary.

“We agree with the balance of submitters that a regulatory approach isn’t needed right now, but increased vigilance is,” said Woolford.

Woolford’s announcement was accompanied by a summary of 50 stakeholder contributions to a previous RBNZ study on crypto and decentralized finance.

Respondents included BlockchainNZ, the country’s crypto advocacy group, Ripple, and institutions such as Westpac and the Bank of New Zealand.

Woolford said that the comments demonstrated that crypto had major dangers and prospects, as well as “uncertainties” concerning the sector’s future, necessitating more scrutiny:

“We agree that caution is needed, which also reinforces the need for enhanced data and monitoring to build understanding.”

The RBNZ seems to be waiting to watch how other countries regulate cryptocurrency before making its own measures.

The RBNZ’s statement on Friday follows its announcement in December that it was developing a monitoring framework to monitor and appraise developments in new forms of “private money,” including cryptoassets. As part of its Future of Money initiative, the bank is doing a comprehensive research. This involves an ongoing study on the eventual establishment of a central bank digital currency (CBDC).

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Harold

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