AUDC to launch NZ dollar-backed stablecoin

AUDC Pty Ltd, the Melbourne company that issues the Australian dollar stablecoin AUDD, is preparing to launch a stablecoin backed by the New Zealand dollar. It announced the plan on 5 June, saying the coin would be pegged one-to-one to the NZ dollar and aimed first at institutional payments, particularly settlements between Australia and New Zealand.

AUDC’s first announcement called the coin NZDC. Its later material, and BusinessDesk’s reporting, call the token NZDSC, issued by NZDC Limited, a wholly owned New Zealand subsidiary of AUDC.

What AUDC says it is building

A stablecoin is a crypto token designed to hold a steady value against an ordinary currency, usually because the issuer holds reserves of that currency. AUDC describes NZDSC as fiat-backed, meaning each token is meant to be matched by a New Zealand dollar held in reserve. The company says the coin will run on its existing governance, compliance and treasury frameworks, and on the banking and custody relationships it already uses for AUDD.

The pitch is speed. AUDC says NZDSC is designed for real-time payments around the clock, cutting settlement between businesses from days to near-instant. Chief executive Effie Dimitropoulos told BusinessDesk the two countries’ two-way trade is worth more than NZ$30 billion, and that most of it still moves over what she called “outdated payment rails”.

Dimitropoulos says “there is currently no bank-grade, fully attested NZD stablecoin on the market”, and that institutional use of an NZ dollar stablecoin has so far been virtually non-existent. AUDC points out that the NZ dollar is one of the world’s ten most traded currencies, yet NZ dollar coins make up less than 0.1% of the global stablecoin market.

The announcements don’t say which blockchains NZDSC will use, what assets its reserves will be held in, or how often they will be independently checked. They also don’t say whether ordinary investors will be able to buy it, or how minting and redemption will work.

“New Zealand has no specific rules on what must back a stablecoin, or on your right to redeem it.”

Who is behind it

AUDC isn’t new to stablecoins. AUDD has been running for several years on networks including Stellar, Ethereum, Solana and the XRP Ledger, and AUDC says it has processed more than A$2 billion in transactions. In February the Australian Securities and Investments Commission granted AUDC an Australian financial services licence to issue and deal in non-cash payment products, which covers AUDD in Australia.

Before announcing NZDSC, AUDC joined a delegation to New Zealand organised by industry groups Blockchain APAC and Blockchain NZ. AUDC says the group held 32 meetings in Auckland and Wellington with banks, super funds, law firms, regulators and government agencies, including MBIE, Inland Revenue, the Financial Markets Authority and the Reserve Bank.

Why the launch hasn’t happened yet

In June, AUDC said NZDSC would be available “within coming weeks”. Later that month, NBR reported that the launch was being held up because AUDC hadn’t been able to secure banking services in New Zealand. A fiat-backed stablecoin needs a bank to hold its reserves and move dollars in and out, so that is a hard blocker rather than a formality.

AUDC says NZDSC is being built with local banking partners but hasn’t named them. At the time of writing, its news page hadn’t announced that NZDSC is live, and Flow News couldn’t find a confirmed launch date.

How stablecoins are regulated in New Zealand

There is no stablecoin-specific law in New Zealand. The Financial Markets Authority told BusinessDesk there are no specific rules on reserve backing or redemption rights. Instead, stablecoins fall under general financial markets law, trust law and contract law, and the FMA decides case by case whether a particular coin is a financial product.

AUDC says it has registered the issuer locally, is aligning with Financial Service Providers Register requirements, has built in anti-money laundering controls, and has applied to join the Insurance & Financial Services Ombudsman Scheme. That last step is an application, not yet confirmed membership.

The closest precedent is NZDD, an NZ dollar stablecoin issued by an Easy Crypto subsidiary since 2023. In March the FMA declared NZDD isn’t a financial product under the Financial Markets Conduct Act, largely because it pays no return and is backed one-to-one by NZ dollars held in trust at a local bank. Lawyers involved stressed that the decision covers NZDD only. AUDC would need its own assessment.

Is there demand?

Supporters see stablecoins as a way to skip slow, costly cross-border banking. Kōura KiwiSaver founder Rupert Carlyon told BusinessDesk that New Zealand has “the opportunity to use stablecoins and other similar products to completely leapfrog” its current banking system.

Others are less sure. MoneyHub founder Christopher Walsh told BusinessDesk he doesn’t see much adoption of NZDD, and that it’s hard to tell whether stablecoins will go mainstream here. NBR has reported that Swyftx, which now owns Easy Crypto, is in talks to sell the NZDD business.

On the other side of the ledger, Inland Revenue identified around 355,000 crypto users in New Zealand in April, who made roughly 57 million transactions worth NZ$36 billion, BusinessDesk reported.

What it means for you

For now, very little changes for individual investors. NZDSC isn’t live, AUDC is targeting banks and businesses first, and it hasn’t said whether retail customers will be able to hold it.

If you do use any stablecoin, remember that it isn’t a bank deposit. Stablecoins aren’t covered by deposit protection, and if the issuer runs into trouble you may have fewer protections than a bank customer would. Before you buy one, check who issues it, what its reserves are held in, whether those reserves are independently attested, whether you can redeem it for ordinary money, and which network you are receiving it on.

This article is general information only and is not financial advice. Crypto-assets can be volatile, and blockchain transfers are generally irreversible.

Eli Hylands

Eli is the founder of Flow Crypto and editor of Flow News, covering crypto for New Zealanders.