New Zealand’s Financial Markets Authority (FMA) launched a public consultation on November 9 to refine a draft regulatory framework for payment stablecoins that are pegged to the New Zealand dollar (NZD). The proposal would exempt such tokens from classification as financial products under the Financial Markets Conduct Act, provided they meet strict backing and redemption criteria.

Proposed exemption and key conditions

According to the FMA’s consultation paper, a stablecoin would qualify for the exemption only if it is fully backed by NZD held in a New Zealand bank, can be redeemed at face value, and is not designed to generate returns for holders. The regulator describes the measure as a “temperature check” to see whether a clearer path to market can be offered without compromising confidence in the broader financial system.

Background on NZDD and market challenges

The NZDD token, issued by Easy Crypto subsidiary ECDD Holdings Limited, was the first NZ‑dollar stablecoin to receive the FMA’s non‑financial‑product designation earlier this year. Despite meeting the regulator’s criteria, adoption lagged behind expectations, and the token’s total supply has reportedly shrunk by nearly 50% since August. Easy Crypto’s Australian parent, Swyftx, closed its New Zealand exchange on March 31 and is currently seeking a buyer for the NZDD business.

Regional context and next steps

The FMA’s approach contrasts with neighboring jurisdictions. Australia’s ASIC treats non‑yield‑bearing stablecoins as non‑cash payment facilities that require a financial services licence, while Hong Kong and Singapore have already issued licences or drafted legislation for stablecoin issuers. The FMA said longer‑term digital‑asset rules are still being drafted, and the consultation will run for a set period before the agency finalises the exemption pathway.

What to watch next

Stakeholder feedback on the draft exemption will shape the final rulebook, potentially influencing whether other NZ‑based issuers seek to enter the market. Observers will also monitor any developments in the sale of the NZDD business and whether the FMA moves toward a dedicated stablecoin licensing regime in the near future.