A New Zealand-based firm says it has created the country’s first legal stablecoin, one backed by the country’s dollar.
According to a press release shared with CoinDesk on Wednesday, the New Zealand dollar stablecoin ($NZDs) is issued by Techemynt, a regulated company with ties to crypto hedge fund Techemy Capital.
Launching today, the cryptocurrency is backed one-to-one by the New Zealand dollar and deployed on the Ethereum blockchain by Blockchain Labs. $NZDs’ code utilizes a framework developed by Coinbase and Circle-founded Centre group.
“$NZDs combines the stability and value of the New Zealand Dollar with the intrinsic utility of cryptocurrency to allow arbitrage, remittance, and digital payments, while positioning the New Zealand Dollar as a prominent participant in the global digital asset economy,” the company said.
To ensure transparency, reserves of the New Zealand dollar backing the stablecoin are to be confirmed by a “leading accounting firm” with reports delivered on a quarterly basis, according to the firm’s website.
Techemynt is registered as a Financial Service Provider in New Zealand, according to a listing by Companies Office – a governmental department within the Ministry of Business, Innovation and Employment.
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The company shares ties with asset investment firm Techemy Capital via its co-founder Fran Strajnar who told CoinDesk via email that Techemynt had spent nine months with law firm MinterEllisonRuddWatts to “ensure” NZDs was up to regulatory standard.
“I would think that any observer would see [a] material difference in the quality and approach of NZDs compared to other efforts which never took off,” said Strajnar.
New Zealand has seen several attempts at the creation of a stablecoin backed by the dollar. In May 2017, the now-defunct cryptocurrency exchange Cryptopia issued the first unregulated stablecoin, NZDT.
After the exchange’s bank got cold feet citing regulatory concerns, Cryptopia was forced to delist the token. Another attempt at creating the stablecoin was slated for the first quarter of 2019, but not before the exchange suffered a hack that ultimately ended in its liquidation.
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“We have spent a significant amount of time ensuring that we have a compliant structure that creates trust for parties looking to utilize the token,” Techemynt’s managing director, Adam Dodds, told CoinDesk via email. “Techemynt has a good understanding of legal nuances of NZ legislation and will work with the appropriate regulators in terms of aligning to future regulation.”