New Zealand’s FMA proposes exemption path for NZD-backed stablecoins

The regulator wants to stop treating certain stablecoins like investment products, focusing instead on their function as payment instruments. The consultation aims to turn a previous single ruling into a repeatable pathway for qualifying issuers.

Proposed Safeguards

The exemption would only apply to what the FMA calls 'payment stablecoins' - tokens referenced to and backed by the New Zealand dollar. Two key safeguards must be met: full backing by NZD held at registered banks, and the ability for holders to redeem tokens at face value on a 1:1 basis.

Regulatory Context

This initiative builds on the FMA's March 2026 designation confirming that NZDD stablecoins are not treated as financial products. However, the new consultation aims to create a broader framework that could apply to multiple issuers.

The FMA has framed this as an interim measure designed to operate until comprehensive digital asset regulation is introduced, gathering input from stablecoin issuers, financial institutions, digital asset businesses and consumers.

Implications

For issuers, the proposal offers regulatory clarity but requires a conservative, bank-anchored model of backing. For consumers, the key protection is the guarantee of redemption at face value, ensuring the stablecoin maintains its peg to the New Zealand dollar.