New Zealand FMA Plans Expanded FinTech Sandbox and New Restricted “On-Ramp” License

​New Zealand's Financial Markets Authority (FMA) is planning to broaden its FinTech sandbox and introduce a new restricted "on-ramp" license aimed at helping innovative firms enter the market under controlled conditions.

The regulator shared the update during the FinTech Hui event in Wellington this week, outlining efforts to provide firms with a supervised pathway into New Zealand's financial sector while maintaining safeguards for consumers.

FMA Chief Executive Samantha Barrass said the authority is developing a restricted licensing framework designed to support emerging financial technology businesses. The proposed "on-ramp" license would allow firms to begin operating with certain limitations that could be gradually lifted as the companies grow and demonstrate compliance.

"This new type of license will support firms to get access to the market with some restrictions in place that can be removed as the firm grows," Barrass said.

According to the regulator, the initiative aims to balance innovation with risk management. By allowing firms to operate under monitored conditions, the FMA hopes to encourage competition while maintaining oversight during early stages of market entry.

The move builds on the regulator's existing sandbox pilot program, which involved six companies testing financial products or services in a controlled environment. The FMA noted that four of those participants have already identified potential pathways to bring their offerings to market.

Insights from the pilot have also influenced regulatory interpretations. One example cited by the authority involved Easy Crypto's non-yielding stablecoin, which the FMA determined does not meet the definition of a financial product under the Financial Markets Conduct Act.

In parallel, the regulator released feedback from its 2025 discussion paper on tokenisation. Industry participants said tokenisation could improve liquidity and expand access to capital in local markets, though respondents also highlighted risks including cybersecurity threats, asset custody challenges, and potential fraud.

Barrass said the FMA will continue working with policymakers to adapt regulatory frameworks to evolving financial technologies and market structures.

The planned sandbox expansion and new licensing concept also suggest a shift in regulatory approach. The FMA has historically taken a strong enforcement stance, including blacklisting offshore foreign exchange and crypto firms and revoking licenses of domestic brokers that failed to meet governance or conduct standards.

By introducing a more flexible entry pathway, the authority appears to be positioning itself as both a regulator and facilitator of responsible financial innovation.

The policy development also comes amid broader regulatory scrutiny of digital assets in New Zealand. Last year, the government announced plans to close cryptocurrency ATMs nationwide and introduce a NZ$5,000 limit on international cash transfers as part of efforts to combat money laundering and organized financial crime.