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Crypto Growth in New Zealand Boosted by Ministry Push Friendly Regulations

Last Updated April 10, 2024 12:52 PM
Teuta Franjkovic
Last Updated April 10, 2024 12:52 PM

Key Takeaways

  • New Zealand considers a crypto-friendly shift.
  • Eight recommendations for growth.
  • CBDC debate: Mixed signals.

In a bold move to integrate into the global digital asset wave, a New Zealand ministry responsible for economic strategy development has proposed  a shift towards a more crypto-friendly stance.

This initiative aims to position New Zealand as a nurturing ground for digital asset growth, reflecting the vision of Andrew Bayly, the country’s minister of commerce and consumer affairs.

New Zealand Contemplates Embracing Cryptocurrency Innovations

Bayly has advocated  for a departure from the conservative “wait and see” approach towards digital assets and blockchain technology, emphasizing the urgency for the government to facilitate the crypto industry’s expansion and to devise strategies for mitigating associated risks.

Responding to the parliamentary Finance and Expenditure Committee’s exploration into cryptocurrencies, Bayly’s team outlined eight strategic recommendations to reinvigorate New Zealand’s engagement with the digital asset sector.

These proposals underscore the necessity for regulatory frameworks that encourage digital asset and blockchain advancements, enhance collaboration between governmental bodies and industry stakeholders, and address the talent scarcity in the digital asset domain through immigration solutions.

The ministry’s advisors also suggested  initiatives to foster a conducive environment for crypto innovation. These include the development of educational resources, offering tax incentives, implementing Anti-Money Laundering (AML) provisions, and advancing the design of a native central bank digital currency (CBDC). Bayly stressed that these recommendations are geared towards establishing a long-term foundation for the digital and crypto asset ecosystem, advocating for a synchronized global regulatory and supervisory approach.

Contrasting Views on CBDCs and Stablecoins

The conversation around CBDCs in New Zealand has witnessed diverging viewpoints, particularly between Bayly and Reserve Bank of New Zealand Governor Adrian Orr. While Bayly sees potential  in developing an in-house CBDC, Orr expressed skepticism regarding CBDCs as replacements for fiat currencies, criticizing the stability of stablecoins.

Orr’s remarks underscore the speculative nature of cryptocurrencies, including stablecoins, which he argues are “only as good as the balance sheet of the person offering that stablecoin.”

This stance reflects a cautionary perspective on integrating cryptocurrencies into New Zealand’s financial system, highlighting the complexities and divergent opinions within the nation’s approach to digital assets.

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