Financial Markets Conduct (ECDD Holdings Limited Stablecoin) Designation Notice 2026

The Financial Markets Conduct (ECDD Holdings Limited Stablecoin) Designation Notice 2026 declares the NZDD Stablecoin not to be a financial product for the purposes of the FMC Act. 

The FMA, after satisfying itself of the requirements set out in section 563 of the Act, considers it appropriate to grant the designation because– 

• the economic substance of the NZDD Stablecoin is that it is not a debt security, as:
  • the NZDD Stablecoin is not an investment, and no income, interest or other gain is paid to the NZDD Stablecoin holder;
  • the practical use of the NZDD Stablecoin is as a means of payment or remittance;
  • the reserve assets backing the NZDD Stablecoin, and held on bare trust for NZDD Stablecoin holders, are not a source of funding for ECDD; and
  • the risks of acquiring the NZDD Stablecoin are not substantially different to the risks of the underlying reserve assets which are not classed as ‘regulated offers’ for the purposes of the Act, and have relevant protections provided through the Reserve Bank of New Zealand’s prudential regulation of New Zealand registered banks.
• the NZDD Stablecoin is in substance a payment mechanism rather than a debt security and is likely to be seen by consumers as a payment product, regulation as a debt security under the Act is unlikely to contribute to confident and informed participation of consumers in the financial markets. It is likely that having the NZDD Stablecoin classed as a debt security would only confuse customers as to the substance of the NZDD Stablecoin:
• continued availability of the NZDD Stablecoin will promote efficiencies in the payments and remittance markets by increasing competition:
• regulation under the Act as a debt security is unlikely to contribute to transparency and/or the provision of useful information to customers as the underlying reserve assets are not classed as ‘regulated offers’ for the purposes of the Act and so are already excluded from disclosure and governance obligations:
• issuing the NZDD Stablecoin will still be a financial service and therefore subject to the fair dealing provisions in Part 2 of the Act.

Download Financial Markets Conduct (ECDD Holdings Limited Stablecoin) Designation Notice 2026 [343KB]