Stablecoin issuer / redeemer in New Zealand

Department of Internal Affairs (DIA): The primary supervisor for most VASPs under the AML/CFT Act 2009. This includes businesses involved in exchanging, transferring, holding, or safekeeping virtual assets.

Financial Markets Authority (FMA): Regulates financial markets, financial service providers (FSPs), and financial products. If a VA business offers services that fall under existing financial product definitions (e.g., derivatives, managed investment schemes, investment advice related to VAs), the FMA's licensing and oversight may be triggered.

Reserve Bank of New Zealand (RBNZ): Regulates banks, non-bank deposit takers (NBDTs), and insurers. Less direct oversight for pure crypto businesses unless they also engage in traditional banking or deposit-taking activities.

AML/CFT Registration (DIA): Most crypto businesses, including exchanges, custody providers, and payment processors dealing with VAs, are categorised as "reporting entities" under the AML/CFT Act. This requires them to register with the DIA as a reporting entity and comply with comprehensive AML/CFT obligations. This is not a "license" in the traditional sense of permitting operation, but a mandatory registration for AML/CFT compliance.

Financial Service Provider (FSP) Licensing (FMA): If a VASP provides services that meet the definition of a "financial service" under the Financial Service Providers (Registration and Dispute Resolution) Act 2008 (FSP Act) – for example, giving financial advice, operating a managed investment scheme involving VAs, or dealing in financial products like VA derivatives – then they will need to license with the FMA. This involves more stringent requirements than just AML/CFT registration.

Primary Requirement: AML/CFT Reporting Entity Registration (DIA)

Businesses that exchange virtual assets for fiat currency, other virtual assets, or facilitate such exchanges are deemed "reporting entities" under the AML/CFT Act. This includes operating a trading platform.

Businesses that offer safekeeping services for virtual assets on behalf of customers (i.e., holding private keys or managing custodial wallets) are considered "reporting entities" under the AML/CFT Act.

Businesses that transmit money or value using virtual assets, or facilitate payments in VAs, are typically classified as "money or value transfer services" under the AML/CFT Act and must register with the DIA.

Potential Secondary Requirement: Non-Bank Deposit Taker (NBDT) Registration (RBNZ) / FSP Licensing (FMA)

If the payment processor also accepts deposits of fiat currency from the public or issues e-money that is redeemable for fiat, they might fall under the RBNZ's NBDT regime. This is less common for pure crypto payment processors but important to consider if they bridge significantly with traditional fiat payment systems. Similarly, if they offer payment-related financial products, FMA oversight might be triggered.

There are no specific minimum capital requirements under the AML/CFT Act for VASPs solely registered as reporting entities.

However, if an FMA license is triggered (e.g., Financial Advice Provider, Market Services Licence), then specific capital and solvency requirements will apply, often based on the nature and scale of the financial services provided. For example, FAPs must demonstrate adequate financial resources.

RBNZ NBDT licensing has significant capital requirements.

Anti-Money Laundering and Countering Financing of Terrorism Act 2009: https://www.legislation.govt.nz/act/public/2009/0035/latest/DLM2140700.html

Identity Verification Code of Practice 2013 (or current version): Issued by the supervisors, this code provides practical guidance on how to meet customer identity verification requirements.

Exchange virtual assets for fiat currency (and vice versa).

Exchange one form of virtual asset for another.

Provide custodial services for virtual assets.

Participate in and provide financial services related to an issuer's offer and/or sale of a virtual asset.

Conduct a comprehensive risk assessment: This identifies and assesses the money laundering and terrorism financing risks specific to their business, customers, products, services, delivery channels, and jurisdictions they operate in. Risks associated with the inherent characteristics of virtual assets (e.g., pseudo-anonymity, speed of transfer, global reach) must be specifically addressed.

Establish and maintain an AML/CFT Programme: This is a documented programme that outlines the policies, procedures, and controls the VASP has in place to mitigate the risks identified in their risk assessment. It must include measures to:

Identity Verification: Obtaining and verifying the customer's full name, date of birth, and address using reliable and independent sources (e.g., passport, driver's license, national ID, proof of address utility bills). For legal entities, verifying the entity's name, legal form, proof of existence, registered address, and articles of association.

Enhanced CDD (ECDD): Required for higher-risk situations, such as:

Politically Exposed Persons (PEPs): Customers who are or have been entrusted with prominent public functions, their family members, and close associates. Requires senior management approval, source of funds/wealth verification, and ongoing monitoring.

High-risk countries: Customers from jurisdictions identified as having inadequate AML/CFT regimes.

Beneficial Ownership: Identifying and verifying the identity of the natural person(s) who ultimately own or control a customer (typically those with more than 25% ownership or control for legal entities).

Ongoing Monitoring: Regularly reviewing transactions and customer information to ensure it is consistent with the VASP's knowledge of the customer, their business, and risk profile. This is crucial for VASPs given the dynamic nature of virtual assets.

Sanctions Screening: Screening customers and transactions against relevant sanctions lists (e.g., UN Security Council sanctions lists).

Obligation to Report: VASPs must report any transaction or activity they suspect is related to money laundering, terrorism financing, or other criminal activity to the New Zealand Police Financial Intelligence Unit (FIU).

No Tipping Off: Reporting entities are prohibited from disclosing to the customer or any third party that a report has been made or that an investigation is underway.