The Reserve Bank of New Zealand (RBNZ) calls for a global alignment in the regulation of cryptocurrencies and stablecoins.
The Reserve Bank of New Zealand (RBNZ) has clarified its stance on cryptocurrencies and stablecoins in a statement published on Friday, June 30. In it, the RBNZ recognized both the significant risks and opportunities presented by these private finance innovations.
As reported by a digital channel on Telegram, Ian Woolford, who serves as Director of Money and Cash at the Reserve Bank of New Zealand, said in a statement issued on June 30 that, from the perspective of the RBNZ, “it is not necessary to implement a regulatory approach at present”. However, he stressed the need to “increase vigilance.”
In a statement via Twitter last February, Ian Woolford, the Bank’s Director of Money and Cash, noted that “new forms of money such as crypto and stablecoins create opportunities and risks for New Zealanders and the financial system.” In addition, he stressed that there is considerable uncertainty about how the industry will evolve.
However, Woolford also pointed out the need to find an optimal balance between innovation and regulation that allows the market to evolve.
New Zealand Prioritizes Strict Monitoring of Cryptocurrencies and Stablecoins
Specifically, the RBNZ statement comes days after it was revealed that a New Zealand-based travel company, We Are Bamboo, lost $2 million in cryptocurrency trading using customer funds earmarked for prepaid travel negotiated through multiple platforms.
The RBNZ agrees that while a regulatory approach may not be necessary at this time, increased oversight is key. Where one of the highlights of the presentations is the need for advanced data and monitoring to build a comprehensive understanding of private money. However, the RBNZ supports the alignment of regulatory approaches between agencies and jurisdictions.
The statement further notes the following:
“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 also pointed out that global harmonization is key to ensuring effective regulation, and that the RBNZ will continue to work with other agencies, particularly through the Council of Financial Regulators, to support healthy growth in the financial ecosystem, as well as continue engaging with industry and other stakeholders on issues as they arise.
The United States Leads Law Enforcement Actions Against Cryptocurrencies, While New Zealand Focuses on Preventing Illicit Activities
The RBNZ statement underscores the caveat that the global regulatory regime is changing globally. In this sense, the United States has been at the center of police actions against cryptocurrencies, while New Zealand has implemented stricter regulations that focus on FATF AML measures and KYC rules to prevent illicit activities and protect consumers.
However, it has been noted that the current rules have not contributed to long-term stability and legitimacy in the cryptocurrency market in many jurisdictions.
In closing, the RBNZ’s stance on cryptocurrencies and stablecoins highlights the need for an optimal balance between innovation and regulation, and the importance of increased oversight in an ever-evolving market.
By Audy Castaneda
