- The Central Bank of New Zealand stated that cryptocurrency regulations are not the way forward.
- More requirements for vigilance are suggested by the Reserve Bank of New Zealand (RBNZ).
Ian Wiilford, Director of Money and Cash, RBNZ, announced that the bank’s agenda will not be fulfilled just by developing the new crypto regulations; proper vigilance is also required. RBNZ made the announcement after monitoring stablecoins and crypto assets. A crypto investment is a digital currency that depends on cryptographic methods and non-traditional payment infrastructure to be performed and stored. Stablecoin, on the other hand, is a cryptocurrency that aims to stabilize its value connected to other conventional assets.
Why is New Zealand not focusing on Crypto regulations?
RBNZ’s recommendation to focus on crypto vigilance is not sudden but is based on proper monitoring of the crypto assets and stablecoins. The public input is considered for the analysis and helped confirm the issues related to the new form of private money.
After collecting 50 submissions from different individuals as a consultative process, New Zealand’s central bank concluded Crypto Vigilance. The consultative process was initiated in December 2022 and ended in 2023. The issued paper on Private Innovation has discussed the growth of the crypto-asset market.
Significant risks and growth opportunities were identified in the consultative process, along with exploring the significant uncertainties about the crypto industry. The major delays were related to the sector’s development and the relevance of optimal balance.
“We agree with the perspective that caution is required; this is the main reason for not proposing a regulatory response”, stated Ian Wiilford.
The primary purpose of the process is to identify the potential uses of digital currency as money, so RBNZ presented the position of the Central Bank Digital Currency (CBDC).
“However, there is no motive to replace the cash system with the CBDC, and the cash system will remain available”, stated Ian Wiilford in the announcement.
Another concept that attracted New Zealand’s attention to the Crypto market is the registration of Binance as a financial service provider.
Binance is a cryptocurrency exchange registered in New Zealand and aims to make similar moves toward France, Spain, and Italy for global expansion. On 10 September, Binance registered with New Zealand’s Ministry of Business, Innovation and Employment (MBIE).
The CEO of Binance, Changpeng Zhao, stated that working with the local team operating with Kiwis will help teach many things to envisage the future of transactions, currency, and the web.
To make a moving work, Binance has been making significant hires involving the senior vice president and developing a board to suggest it on political and regulatory matters.
Apart from this, Cryptocurrency exchange Huobi Global ended its crypto derivatives trading practices in New Zealand just a couple of months after the extension of the operations.
The director of Money and Cash suggested focusing on crypto Vigilance over crypto regulations after analyzing the stablecoin and crypto assets. The public’s input is considered to carry out the recommendation and come into light when Binance, a cryptocurrency exchange, registered with the nation as the financial service provider.