‘Increased vigilance’ of cryptocurrency planned

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The Reserve Bank of New Zealand is backing off any moves to regulate cryptocurrencies anytime soon, but said it is increasing surveillance of the sector.

The central bank said it had taken on board the prevailing view of public submissions on its study into crypto assets and stablecoins as part of its research into the future of money.

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

However, the RBNZ is collecting data and monitoring to understand risks and opportunities would be pursued, including information sharing with relevant overseas authorities, over the coming year.

“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.”

The RBNZ said another reason for caution was to watch international developments on regulation, which could ultimately lead to harmonising cryptoasset regulation.

Stablecoins are cryptoassets which are tied to an existing currency or asset such as the US dollar or gold.

The RBNZ is also working on the development of a possible digital currency in New Zealand.