Techemynt launches New Zealand dollar stablecoin

From a commercial perspective, cryptocurrencies like Bitcoin and Ethereum don’t have a compelling use case in the payments space, as their value fluctuates widely. Just in the last six weeks, for example, the Bitcoin price has been remarkably volatile – falling as low as 36K in mid-February before soaring to 61K in mid-March. For businesses and individuals, this volatility means most cryptocurrencies are unrealistic options for transactional commerce.

Stablecoins are one solution to this problem. They are a type of cryptocurrency that is backed by a reserve asset, such as fiat currency or gold, and their value is pegged to that of the reserve asset. The first stablecoin was Tether (USDt) which was launched in 2014 and is backed one-for-one by US dollars.

Tether quickly gained widespread acceptance and application and is now the third-largest cryptocurrency by market capitalization. Since the launch of Tether, many other stablecoins pegged to fiat currencies have entered the marketplace and there are now stablecoins for the CNY, EUR, GBP, KRW, SGD, CHF, IDR, VND, BRZ, and more.Fiat pegged stablecoins now make up a large part of the total cryptocurrency market capitalization.

Like Tether, these new stablecoins have also gained traction as an easier way to navigate the transactional hurdles of international commerce by pairing the instant processing, security, and privacy of cryptocurrency payments with the stability of the underlying asset.

$NZDs – the New Zealand dollar stablecoin

Today, the New Zealand dollar is the world’s tenth most-traded currency. As a blockchain-based stablecoin, the $NZDs stablecoin combines the stability and value of the New Zealand dollar with the intrinsic utility of cryptocurrency to allow arbitrage, remittance, and payments in the global digital asset economy.

Issuer Techemynt is a New Zealand registered Financial Service Provider (FSP). The $NZDs is backed one-for-one with physical New Zealand dollars in a cash and cash-equivalent treasury. It was deployed on the Ethereum blockchain by Blockchain Labs, using the robust FiatToken framework developed by Centre.

Techemynt executive director Fran Strajnar, says $NZDs was in development for over a year and potential users will include forex and crypto traders, crypto funds, investors, and eventually merchants and everyday consumers. $NZDs will be available to buyers who wish to acquire NZ$100,000 (or more) from Techemynt directly – and smaller orders can be filled on secondary markets like the Dasset exchange (also a New Zealand registered FSP).

Anyone purchasing $NZDs directly from Techemynt will be required to complete customer due diligence checks in line with Techemynt’s FSP obligations under the Anti-Money Laundering and Countering Financing of Terroism Act 2009 (AML/CFT) of New Zealand.

Strajnar says as onramps and offramps evolve it is envisaged that $NZDs will be able to be transferred to DeFi platforms. Currently DeFi platforms have the potential to provide participants with much higher yields compared to traditional bank accounts.