New Zealand's FMA Proposes No Longer Treating Compliant NZD Payment Stablecoins as Financial Products

November 9: New Zealand's Financial Markets Authority (FMA) has published a consultation on the regulatory pathway for payment stablecoins denominated in and backed by the New Zealand dollar. Under the proposal, the FMA plans to use a class designation so that such stablecoins meeting specific requirements and safeguards are no longer treated as financial products under the Financial Markets Conduct Act (FMC Act). Qualifying stablecoins must be fully backed by New Zealand dollars held in a New Zealand-registered bank and redeemable at par. FMA General Counsel Liam Mason said stablecoins are generally designed more like a means of payment than an investment. The FMA said no decisions have been made yet and the proposal is an interim measure while broader digital asset regulatory work proceeds. Consultation closes on December 18.