New Zealand Reserve Bank Lax on Cyber and Crypto Regulations
New Zealand Reserve Bank Lax on Cyber and Crypto Regulations
New Zealand Bank has rejected calls for enhanced regulations designed to target contemporary cyber threats, including ran-somware and other challenges associated with virtual currencies in New Zealand.
A speech, which has been published on the New Zealand Bank’s website, Reserve Bank representative Toby Fiennes articulates the position of bank on contemporary cyber threats. “The dynamic cyber environment means that organisations have to be nimble in their approach to cyber security focused on outcomes, rather than prescriptive compliance exercises.”
The speech indicates recognition that the challenges posed by crypto will be dynamic, and that the threats posed by online crime cannot simply be regulated out of existence. “The nature and incidence of cyber risk, meaning that typical approaches to risk management and disaster recovery planning may not be appropriated. While cyber vulnerabilities can be mitigated, the potential sources of cyber threats and the attack footprint are just too broad, so they can never be eliminated.”
Fiennes Stated That the New Zealand Reserve Bank Is Watching The “Emerging Wave of Digital Disruption”
While is it recognizing the short term disruptive potential of contemporary fintech innovations like bitcoin (BTC), the New Zealand Bank also believes that these new technologies are likely to brings benefits to the financial system. The bank recommends against heavy handed prescriptive regulations for crypto suggesting that legal guidelines for virtual currencies should be flexible, adaptive, and not restrict innovation. “Looking forward, the Bank and other regulators will need to make sure the regulatory regime in New Zealand is adaptive should any new business models become systemic, while not unduly harming innovation.”
Central bank also revealed that it is working in partnership with Innovation, Employment, Ministry of Business, and the Financial Markets Authority to ensure that New Zealand cultivates a regulatory climate that will encourage financial innovation within the digital sphere.
Do you agree with the bank of New Zealand’s opinion that regulations designed to protect against cyber-crime could harm innovation? Share your thoughts in the comments section below!