The Financial Markets Authority has opened a consultation on payment stablecoins tied to the New Zealand dollar. The window began on November 9. At the centre is a proposed class designation that would keep these tokens outside the Financial Markets Conduct Act’s financial product category.
What the FMA wants to test
The regulator is asking whether payment coins can get a clearer route to market while it works on longer-term digital asset rules. For now, the FMA is creating an exemption from securities law rather than relying on a dedicated crypto or stablecoin licensing regime. That gap matters. New Zealand does not yet have a standalone law for this sector.
The draft conditions include bank-held New Zealand dollars backing the token and redemption at face value. If a product meets those terms, the FMA suggests it can be treated as a payment coin, not an investment token. Liam Mason, the FMA’s general counsel, framed the consultation as a temperature check. The question is whether stablecoin products can move ahead without weakening confidence in the financial system.
NZDD shows the market problem
The policy work comes as the domestic stablecoin sector struggles. NZDD, issued by Easy Crypto subsidiary ECDD Holdings, is the only NZD stablecoin the FMA has said is not a financial product. That decision came earlier this year. Even so, adoption has not matched expectations. Total supply has reportedly fallen nearly 50% since August.
Easy Crypto’s Australian parent, Swyftx, closed the New Zealand exchange on March 31. It has been looking for a buyer for the stablecoin business since. The sale process adds a practical test for the FMA’s approach. A regulatory green light has not, by itself, created demand.
Pilot results and regional context
The FMA’s December 2024 fintech pilot drew 24 applicants. Six were admitted to the sandbox, but only NZDD reached the market. FMA chief executive Samantha Barass has acknowledged that participants raised concerns about uncertainty, cost, and the steep transition to full licensing. That feedback may shape how the regulator handles the next stage.
New Zealand is not alone in sorting out stablecoin rules. Australia’s ASIC treats non-yield-bearing stablecoins as a non-cash payment facility, which generally means issuers need an Australian financial services licence. Canberra has passed digital asset reforms and proposed a tokenised stored value facility category for payment stablecoins. Hong Kong granted its first two stablecoin issuer licences in April, and Singapore published draft legislation in September to fold its rules into the Payment Services Act. New Zealand, perhaps, is taking a narrower path. The consultation will show whether that path is enough.
