Crypto Regulation: A Kiwi Perspective

While the global call for cryptocurrency regulation grows increasingly strident, and the contentious concept of regulation through enforcement continues to stir debate, a comprehensive document drafted for the Parliament of New Zealand has put forth a distinct suggestion: an unhurried and adaptable approach. The study in question was instigated at the behest of the Finance and Expenditure Committee of the New Zealand House of Representatives in the year 2021, bearing the title "Examination into the contemporary and future essence, repercussions, and perils of cryptocurrencies."

Jointly penned by a collaborator at the legal enterprise MinterEllisonRuddWatts and an associate professor of commercial law hailing from the University of Auckland, this 99-page composition scrutinized formerly solicited public opinions and proffered 22 sets of counsel. The overarching viewpoint upheld the value of digital possessions and blockchain technology in totality.

In the face of hurdles such as fluctuation, ecological ramifications, and illicit employment, the study issued a word of caution against draconian constraints, reasoning that such measures would "diminish the sustainability and competitiveness of enterprises, as consumers progressively gravitate towards cryptocurrency-based transactions."

Additionally, it discouraged hasty regulatory efforts:

"Crafting and enacting an encompassing [regulatory] framework would prove to be an intricate undertaking. [...] To the best of our understanding, agencies are not currently endowed with the resources or acumen required for such oversight."

"Instead, our suggestion is for predicaments to be tackled as they manifest. We advocate that the Government and regulatory bodies formulate lucid and coherent guidelines regarding the handling of digital assets under existing laws," appended the report. Elected officials are advised to monitor the advancement of regulations in the United States, United Kingdom, and Australia before forging analogous decisions domestically.

“Because it is early in the development of digital assets and blockchain, we recommend that the Government and regulatory agencies proceed carefully and do not design and implement a fully integrated and consistent regulatory framework for digital assets at this point in time.… pic.twitter.com/A8uDtX3yZK

— Joshua Rosenberg (@_jrosenberg) August 18, 2023

Certain regulatory actions are inevitable. The document proposes that the Financial Markets Authority (FMA) establish a novel investment category tailored to digital assets, complete with a controlled experimental zone, as well as a fresh category for personal property. Additionally, the report posits that the FMA should take the helm of a new subcommittee within the Council of Financial Regulators, entrusted with delivering counsel and a harmonized reaction to "challenges confronting the sector."

To synergize with the digital asset sector, a more expansive task force comprising representatives from all pertinent government bodies — law enforcement, tax agencies, the central bank, and other stakeholders — ought to be instituted. The research on central bank digital currency is advised to persist, culminated the report.