By Michael Scott
An autonomous report made for a House Committee suggests the need for the government to enhance the creation of digital asset technology and cooperative regulation.
Cries for crypto regulation are becoming louder in several parts of the globe, and regulation by enforcement is a debate. However, a report made for the New Zealand Parliament has suggested a gradual and agile method.
The legislators observe need for the government to support the journey towards framework clarity.
New Zealand Parliamentary Report Acknowledges Positive Aspect of Digital Assets and Blockchain Technology
This report titled’ Inquiry into the current and future nature, impact, and risks of cryptocurrencies’ was commissioned in 2021 by the Finance and Expenditure Committee of the New Zealand House of Representatives.
It was co-written by a partner at MinterEllisonRuddWatts, a law firm, and an associate professor of commercial law at the University of Auckland. This 99-page report considered earlier sought public comments and provided 22 suggestions. It embraced a positive perspective of digital assets and blockchain technology.
New Zealand Legislators Warn Government Against Imposing Extreme Limitations
Despite problems such as environmental effects, criminal use, and volatility, the report warned against extreme limitations. It revealed that they would minimize the competitiveness and feasibility of such firms as buyers progressively utilize cryptocurrencies to make payments.
It also warned against early regulation. In this case, creating and implementing an integrated regulatory model would be an intricate attempt. Besides, agencies lack the equipment and resources needed to manage it.
New Zealand Government Urged to Establish Participative Platform While Observing Global Regulatory Progress
The report also suggested the need to address problems as they come up. As such, regulators and governments should establish reliable and clear guidance to guide the handling of digital assets under present law. Prior to making local decisions, lawmakers can observe regulatory progress in Australia, the United States, and the United Kingdom.
It is difficult to avoid some regulatory intervention. According to the report, the Financial Markets Authority (FMA) should utilize a sandbox and a new class of private property to develop a new class of investment for digital assets.
Guiding Financial Regulators Considered Critical Towards Solving Challenges Inherent in Crypto Industry
Additionally, this report suggests the need for the FMA to guide a new Council of Financial Regulators subcommittee to offer advice and a coordinated response to challenges experienced in the industry.
A bigger working group comprising representatives from the concerned government agencies, including the central bank, police, and tax authorities, must be created to partner with the digital asset industry. Finally, the report suggested the need for continued research into central bank digital currency.