• The Reserve Bank of New Zealand (RBNZ) has stated that it will not propose a regulatory approach towards cryptocurrencies and stablecoins, but recommends increased vigilance.
• RBNZ received 50 submissions from stakeholders as part of a consultative process that it started in December 2022.
• The island nation’s central bank also indicated its latest position on central bank digital currency (CBDC).

Reserve Bank of New Zealand Not Exploring Crypto Regulation

The Reserve Bank of New Zealand (RBNZ) has said it won’t propose a regulatory approach towards stablecoins and cryptocurrencies, but would recommend increased vigilance, the central bank announced on Friday. “Issues raised by crypto-assets and other innovations do not fall neatly within agency boundaries,” said Ian Woolford, Director of Money and Cash, RBNZ.

Consultative Process

The island nation’s central bank came to the conclusion after receiving 50 submissions from different stakeholders as part of a consultative process that it started in December 2022. It had sought submissions about an Issues Paper on Private Innovation that discussed the development of the crypto-asset market.

Submissions Received

“The submissions reinforced our view that there are significant risks and opportunities, but also significant uncertainties about how the sector will develop and where the optimal balance will lie,” the announcement said. “We agree with the view that caution is needed. This is why we are not proposing a regulatory response at this point.”

Central Bank Digital Currency

While the focus of the process was on the potential uses of crypto-assets as money, the RBNZ indicated its latest position on central bank digital currency (CBDC). “While we continue to explore CBDCs in more detail in research projects with external partners, no decision has been made to proceed with any form of CBDC issuance or adoption,” according to its statement.

Increased Vigilance

The RBNZ concluded by recommending increased vigilance over cryptocurrency markets due to their high volatility and uncertain nature: “It is essential for consumer protection purposes that consumers understand what they are buying when investing in such products” said Woolford.