New Zealand’s Financial Markets Authority (FMA) has opened a consultation on a proposed exemption for qualifying NZ dollar payment stablecoins from financial product regulation. The proposal could change the rules applying to issuers, but no decision has been made. Submissions close at 5 p.m. on December 18.
The proposed classification would cover tokens backed by NZ dollars and designed for payments rather than investment. Issuers would have to meet conditions on reserves, redemption and payments to holders.
Proposed conditions for NZ dollar stablecoins
The FMA is considering a class designation under section 562(1)(c) of the Financial Markets Conduct Act 2013. This type of formal designation can apply to a category of products. If adopted, qualifying stablecoins would not be treated as financial products under the Act.
Eligible tokens would need to reference and be backed by NZ dollars, with payment—not investment—as their intended use. Issuers would also have to hold sufficient funds with a registered New Zealand bank under a bare trust. In this arrangement, a trustee holds assets for beneficiaries but does not actively manage them.
Holders would need to be able to redeem tokens at par, and issuers could not pay them a return. Issuers relying on the proposed designation would also have ongoing obligations, including public disclosure of reserve information. The consultation asks what safeguards should apply and how those continuing requirements should be structured.
FMA seeks views from issuers and users
The consultation is aimed at stablecoin issuers, digital-asset businesses, financial institutions, consumers and other interested parties. The FMA wants feedback on whether the proposed regulatory treatment fits the design and use of these tokens, and what ongoing oversight and protections may be needed.
Liam Mason, the FMA’s general counsel, said the regulator wants to test whether its approach should better reflect stablecoins’ design and purpose while retaining appropriate safeguards. He stressed that no decision has been made.
For market participants, the central questions are which stablecoins would qualify and how reserve disclosures and redemption requirements would work in practice. Until the FMA makes a formal designation, the conditions remain proposals and no exemption is in force.
Submissions close on December 18
The FMA opened the consultation on November 9, 2026. Interested parties can submit feedback through the regulator’s consultation page until 5 p.m. on Friday, December 18.
After the consultation closes, the FMA will review submissions and finalise its policy proposal. If it decides to make a class designation, the regulator will proceed with implementation. No date has been announced for a decision.