- The FMA proposal covers NZD stablecoins fully backed by funds held on bare trust at registered banks.
- Qualifying stablecoins must be redeemable at face value and pay holders no return.
- Issuers would publish monthly reserve confirmations and annual independent verification results.
New Zealand’s Financial Markets Authority is seeking feedback on a proposal to exempt some New Zealand dollar-backed stablecoins from the country’s financial-product rules, provided issuers meet reserve, redemption, and reporting conditions.
The designation would cover tokens backed one-for-one by New Zealand dollars held on bare trust at a locally registered bank, redeemable at face value and paying holders no return. The submissions close at 5 p.m. on December 18, 2026.
FMA Proposal Sets Narrow Conditions
The FMA said the proposal focuses on payment stablecoins tied to the New Zealand dollar, rather than tokens structured as investments or backed by a mix of assets. Issuers would need to hold reserves equal to the face value of tokens in circulation. The money could not be used to fund the issuer. The proposal would not cover reserves held in government securities or money market funds.
Holders would be able to return tokens to the issuer for face value, subject to commercially reasonable conditions agreed with the account holder. These may include compliance checks, timing, minimum amounts and fees.
The designation would cover qualifying tokens issued or transferred after it takes effect. In addition, issuers would not need individual approval or to be named in the notice. The FMA is seeking views on whether issuers should notify the regulator before relying on the designation.
Related: New Zealand Adds Digital Finance to Core School Curriculum From 2026
Reserve Reports and Annual Checks Required
Issuers would have to maintain full reserves and publish monthly confirmation on a public website. They would also need to conduct an independent annual verification comparing reserves with tokens outstanding, publish the results, and disclose that they rely on the designation.
The authority is asking whether annual checks should follow a recognized assurance standard and be conducted by a qualified auditor. It is also seeking views on additional safeguards, including clearer information about redemption fees, warnings that tokens are not bank deposits, capital buffers and dispute-resolution membership.
If an issuer fails to meet an ongoing condition, its tokens would be treated as financial products during the period of noncompliance. The designation would not remove obligations under other laws, including anti-money-laundering requirements, or change the treatment of bank-held reserves. The FMA said the designation would not endorse an issuer or its stablecoin.
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