NZ is looking to introduce open banking legislation to formalise how interoperability between banking systems and other external service providers e.g. shopping carts, payment gateways, accounting systems, company registries, lay buy services etc. works.
See news item here:
New Zealand is able to do this as they’ve already modernised their core banking systems. Most banks already publish API’s to their banking systems. This makes it easy for 3rd parties e.g. Xero, PayPal, Stripe etc. to develop / code up integrations. The new regulations should standardise how it’s done and bring in more certainty to NZ.
Why is this important in the crypto space?
Most people still have most of their financial resources tied up in legacy banking systems. Open banking APIs make it easier for exchanges to build better on ramps to the crypto space. Because of this, blockchain users may use a decentralized exchange (DEX) to conduct peer-to-peer cryptocurrency transactions directly.
EasyCrypto in New Zealand is the closest we have to this. They don’t hold any of the crypto you purchase in a centralised wallet. Instead they connect directly to your NZ bank account and allow you to purchase the crypto currency you want and then send it directly to your wallet. This significantly reduces risks.