The Reserve Bank of New Zealand issued a statement today (Friday) to notify its intention to increase the monitoring of stablecoins and crypto assets. However, the central bank does not believe in bringing regulatory oversight to the industry.
No Need for Crypto Regulations
The regulatory clarification came following public input around the issues and risks of private money on the financial system and monetary sovereignty.
“We agree with the balance of submitters that a regulatory approach isn’t needed right now, but increased vigilance is,” Ian Woolford, Director of Money and Cash at the Reserve Bank of New Zealand, said in a statement released today (Friday).
Prior to deciding on its stance, the central bank considered the input of 50 stakeholder submissions on crypto and decentralized finance. The stakeholders are the crypto advocacy group, BlockchainNZ, blockchain company Ripple, and banks like Westpac and the Bank of New Zealand.
New forms of money such as crypto and stablecoins create opportunities and risks for New Zealanders and the financial system. Have your say now on these and how we should respond: https://t.co/RE9j0ryjVk#rbnz pic.twitter.com/yvcR2tjd9y
— Reserve Bank of NZ (@ReserveBankofNZ) February 10, 2023
“The submissions reinforce our view that there are significant risks and opportunities from stablecoins and other private money innovations, but also significant uncertainties about how the sector will develop and where the optimal balance will lie. We agree that caution is needed, which also reinforces the need for enhanced data and monitoring to build understanding,” Woolford added.
Jurisdictional Confusion?
He further highlighted that the Reserve Bank of New Zealand has no jurisdiction to regulate “cryptoassets and other innovations.”
“However, issues such as consumer and investor protection or potential commercial or regulatory barriers to entry do matter for the collective vision we have for a reliable and efficient money and payment system that better meets the evolving needs of New Zealanders,” Woolford added.
Meanwhile, New Zealand’s Financial Markets Authority (FMA) raised multiple alarms against retail investments in ‘volatile and risky’ Bitcoin. The crypto industry is also unregulated in the country.
The New Zealand central bank’s stance against bringing crypto regulations occurred when other global regulators were in line to control the booming industry. European Union has already passed the Markets in Crypto Assets (MiCA) law, while jurisdictions like Hong Kong also brought progressive crypto regulations.
This article was written by Arnab Shome at www.financemagnates.com.
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