A paper written for the New Zealand Parliament has suggested a slow, adaptive approach, despite the call for crypto legislation growing louder and louder around the world, and regulation by enforcement being controversial.In 2021, the Finance and Expenditure Committee of the New Zealand House of Representatives ordered a report with the working title “Inquiry into the current and future nature, impact, and risks of cryptocurrencies.”
The 99-page study, which was cowritten by a partner at the legal firm MinterEllisonRuddWatts and an associate professor of commercial law at the University of Auckland, took into account feedback from the public that had previously been requested and included 22 suggestions.It adopted a positive stance toward digital assets and blockchain technology in general.
The research issued a warning against overly harsh regulations despite issues like volatility, environmental damage, and criminal usage, stating that they would “reduce the viability and competitiveness of such businesses as purchasers increasingly make payments in cryptocurrencies.”It also issued a warning against attempting to regulate too soon.“Creating and implementing an integrated [regulatory] framework would be a complicated endeavour.Based on our understanding, agencies are not resourced or equipped to manage this.” “Instead, we recommend that problems are addressed as they arise. We recommend that the Government and regulators create coherent and consistent guidance on the treatment of digital assets under current law,” the report added.
Before making local judgments, legislators can track the development of regulatory frameworks in the United States, the United Kingdom, and Australia.Certain regulatory requirements cannot be avoided.The Financial Markets Authority (FMA) should establish a new class of personal property and a new class of investment for digital assets, according to the research.The report also suggests that the FMA chair a brand-new subcommittee of the Council of Financial Regulators to offer guidance and a coordinated response to “issues facing the industry.”
To collaborate with the digital asset sector, a wider working group should be established with members from all relevant government organizations, including the central bank, tax authorities, and police.The paper recommended continuing central bank research on digital currencies.