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Chapman Tripp welcomes the Financial Markets Authority’s (FMA) recently launched consultation on tokenisation in New Zealand’s financial markets (Consultation).
The Consultation seeks feedback on the opportunities, risks, and regulatory challenges associated with the use of tokenisation and distributed ledger technology (DLT) in New Zealand financial markets. It aims to inform the FMA’s approach to supporting innovation, improving regulatory certainty, and enhancing consumer protection.
Chapman Tripp strongly supports the FMA’s review. Global change is happening at pace. Relatively minor development of domestic regulatory policy settings could have a big impact on New Zealand’s ability to compete and adapt across both wholesale and retail financial markets. We strongly encourage interested parties to make a submission.
Developments in tokenisation
Tokenisation involves the digital representation of assets such as securities, real estate, and commodities on distributed ledgers (as well as digitally native products).
It has recently found significant institutional and general use cases in stablecoin development across global markets, and is increasingly being explored internationally as a way to modernise financial infrastructure, increase market efficiency, broaden investor access and speed-up institutional cross border payments.
While activity in digital securities issuance and cross-border payment innovation remains modest compared to traditional activity, over the last 18 months we have seen significant momentum offshore, with major financial centres moving from pilot projects to live offers.
- The Eurozone has seen central banks and market infrastructure providers successfully issue digital bonds using blockchain technology. In Asia, Singapore and Hong Kong have established frameworks to support the issuance of and broader market adoption of digital bonds.
- Other jurisdictions, including Switzerland, the United Kingdom, and the United States, are also developing or refining comprehensive regulatory regimes to facilitate tokenisation while maintaining investor protections and market integrity.
- Closer to home, Australia’s Project Acacia is a joint effort between major financial regulators and industry participants. The project focuses on how digital money and settlement infrastructure can support the development of wholesale tokenised asset markets. It has recently announced that it is moving into a testing phase, involving 24 specific use-cases.
Our views
Without action New Zealand risks being left behind. As tokenisation and stablecoin development gathers momentum, we will need a forward-looking regulatory approach to allow New Zealand’s financial markets to hold their own, maintain the interest of – and ability to interact with – offshore capital, and continue to be fair, efficient, and competitive.
Given New Zealand’s often combined retail/wholesale markets, we also require solutions that will meet retail investor protection requirements where relevant. However, it is important that the regime does not limit institutional use cases which have the potential scale to drive growth and uptake across the sector as a whole.
The Consultation closes on 31 October 2025. Feedback can be submitted via the FMA’s website.
We encourage interested clients and stakeholders to contact Chapman Tripp to further discuss potential directions of local market development and priorities for submission.
