NEW ZEALAND Law and Practice Contributed by: James Cochrane, Andrew Comer, Carlo Wan and Graeme Crombie, Lane Neave
is now running but closed to new participants. The sandbox is not limited to blockchain projects, but it is relevant to blockchain-based products. As of March 2026, the FMA identified that four of the firms involved in the sandbox pilot have identified a pathway to market for products or services that may have otherwise been delayed by regulatory uncer- tainty or other barriers. The FMA asserts that the sandbox represents a sig- nificant development for New Zealand’s fintech and digital asset sector because it gives firms a supervised pathway to test innovative offerings while obtaining guidance on the application of existing financial mar- kets regulation. For the FMA, the pilot provides practi- cal insight into emerging business models, regulatory barriers, consumer risks and possible future regula- tory responses. 1.1.3 Regulation of Blockchain Technology The General Attitude of Government and Regulators to Blockchain-Based Industries NZ has adopted a cautious approach towards regu- lating blockchain and crypto-assets. The FEC Report notes there are no legislative regimes in NZ directly targeted at digital assets. NZ continues to maintain a cautious, “wait and see” stance to regulation, but has begun engaging more actively with specific issues such as tokenisation, sta- blecoins, tax reporting and consumer protection. Parliamentary Inquiry The New Zealand Parliament – Pāremata Aotearoa Inquiry into the current and future nature, impact and risks of cryptocurrencies (the “Parliamentary Inquiry”) which commenced in 2021, and its related FEC Report and Government Response, are the first significant and co-ordinated legislative steps in developing NZ’s digital assets laws. FEC Report The FEC Report includes 22 recommendations for the government, emphasising a balanced regulatory approach. Key recommendations include creating a “Digital Assets Cross-Agency Working Group”, devel- oping educational resources, establishing a regulatory
sandbox for testing innovations, and ensuring con- sumer protection. The report advises against a single primary regulator due to the diverse uses of digital assets, and highlights the importance of flexible regu- lation that evolves with the industry. Government Response Although the FEC Report asked the government to consider all recommendations, the Government Response does not unfortunately address each one individually. Instead, it highlights ongoing work by various government entities that align with the FEC Report’s recommendations: • the RBNZ’s exploration of the potential for a CBDC; • the Council of Financial Regulators – Kaunihera Kaiwhakarite Ahumoni (CoFR) is providing guid- ance to start-ups through its Digital and Innovation Community; • the Ministry of Justice (MOJ) is implementing recommendations for the AML/CFT treatment of virtual asset service providers; • the FMA continues to offer guidance on digital assets and their treatment under the FMC Act, and takes regulatory action against breaches of finan- cial markets law; • the IRD provides guidance and information on the tax treatment of digital assets in NZ; and • the Government Response concludes with a com- mitment to “continue to consider matters raised by the [FEC] and monitor international market devel- opments”. In relation to “regulation of digital assets” the Gov- ernment Response notes that the FEC Report does not recommend adopting a fully integrated regulatory system, and instead suggests more consistent and informed guidance from government agencies on how existing legislation and regulatory rules apply in the digital asset space. It also recommends adding a defined class of digital assets which are used for investment purposes as a new category of “finan- cial advice product”, to bring them into the regulated financial advice and client money/client property ser- vices regimes.
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