New Zealand Lawmakers Advise Against Hasty Regulation of Crypto

• A New Zealand parliamentary report has asked the government to take it slowly when it comes to crypto regulation.
• The Finance and Expenditure Committee of the New Zealand House of Representatives commissioned the report in 2021.
• The report asked lawmakers and regulatory agencies not to rush with crypto regulation at this time
• The parliament believes that the crypto sector is still in the early stages of development and that rapid changes might occur.

The New Zealand Parliament wants to take it slow when it comes to the regulation of the digital asset sector, which is one of the most volatile asset classes and is more prone to scams and exploits. Interestingly, in the United States and across the globe, the call for regulation of virtual assets has surged through the roof, with investors and blockchain businesses asking for clear guidelines and lawmakers stalling or adopting a regulation by enforcement approach

The parliamentary report was commissioned by the Finance and Expenditure Committee of the New Zealand House of Representatives in 2021 and was titled “Inquiry into the current and future nature, impact, and risks of cryptocurrencies.” The document is 99 pages long and has been co-written by a partner at the law firm MinterEllisonRuddWatts and a University of Auckland associate professor of commercial law.

The report recommends that the government of New Zealand and regulatory agencies “proceed carefully and do not design and implement a fully integrated and consistent regulatory framework for digital assets at this point in time,” because “it is early in the development of digital assets and blockchain.”

“We recommend that problems be 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,” said the report

The report further asked the New Zealand government to adopt a “technologically neutral approach to regulation of the digital asset space, tailoring measures in relation to digital assets and related services and technology as required to deal with material risks associated with them.”

Additionally, the report also asks the Financial Markets Authority (FMA) to create a new class of assets for cryptocurrencies with a sandbox, and a new class of personal property. It also proposes that the FMA should lead a new Council of Financial Regulators subcommittee “to provide advice and a coordinated response to “issues facing the industry.”

As reported earlier by Bitnation, the regulation of enforcement tactics used by the United States Securities and Exchange Commission (SEC) against crypto firms has been widely criticized by entrepreneurs and lawmakers. Senator Cynthia Lummis recently said that creating a framework for the crypto industry is a top priority.