Introducing New Zealand Dollar Stablecoin
A collaboration between Easy Crypto, a leading New Zealand crypto exchange, and Labrys, an Australian blockchain development firm, has significantly advanced the nation’s digital asset space. The much-awaited launch of the New Zealand dollar-pegged stablecoin (NZDD) marks a significant step forward in the evolution of stablecoins in the local crypto landscape.
The NZDD stablecoin provides unparalleled security and trust as a 1:1 ratio of cash securely held in trust and governed by the New Zealand Financial Markets Authority, ensuring compliance and stability support it. Initially launched on the Ethereum network, NZDD developers plan to expand its presence across multiple platforms.
With plans in the works, the stablecoin will expand its reach onto platforms like Arbitrum, Coinbase’s Base, the BNB Smart Chain, Optimism, and Polygon.
Why Create The NZDD Stablecoin?
The motivation behind Easy Crypto’s launch of the stablecoin stems from a keen observation of the digital transaction challenges in the country. New Zealanders had difficulties maximizing their gains when using US dollar-pegged stablecoins.
According to Janine Grainger, co-founder and CEO of Easy Crypto, this disparity prompted the NZDD’s development. Grainger emphasized that the NZDD not only fills a void in the crypto market but also acts as a catalyst in bringing traditional finance and the innovative realm of digital currencies together.
She hoped this initiative would push New Zealand into a more progressive era by providing the country with an adaptable digital currency capable of replicating every function of the NZD. Easy Crypto also introduced a state-of-the-art multi-currency self-custody wallet with enhanced security features.
This innovative wallet is based on multi-party computation cryptography, a complex encryption technique. Rather than using a traditional seed phrase for security, Easy Crypto uses a user’s “trusted social circle” to protect parts of the key, ensuring enhanced protection and accessibility.
New Zealand’s Crypto Regulatory Landscape
A report commissioned by New Zealand’s parliament in August 2023 highlighted the country’s stance toward crypto regulation. The report commended the country’s “agile” approach, emphasizing the importance of a responsive strategy that addresses issues as they arise.
It also stresses the government’s role in developing clear and consistent guidelines to treat digital assets within existing legal frameworks. Prior attempts at creating a New Zealand dollar-pegged stablecoin have taken place, notably in 2021, when Australian financial services provider Techemyny launched $NZDs.
This initiative aimed to create a stablecoin pegged to New Zealand’s national fiat currency to improve financial accessibility and innovation in the country. However, people raised questions about the bridge adopted for the development of the stablecoin, jeopardizing the stability of this venture in 2022.
These concerns followed a hack of the DFX Finance protocol in November 2022, which resulted in a denial of the bridge. As a result, a substantial portion of funds remain stranded on the Polygon blockchain, raising concerns about the stablecoin’s stability and security.
Hence, these difficulties depict the complexities of navigating the crypto landscape, particularly security vulnerabilities and the interplay of different blockchain protocols.
