New Zealand’s ministry of commerce and consumer affairs has issued a warning to the country’s leaders about the dangers of a slow approach to cryptocurrencies. Minister Andrew Bayly has specifically called upon the Australian government to finalize its stance on crypto before it is too late. This comes at a time when the cryptocurrency sector is gaining momentum in other countries such as the UK, the UAE, the US, South Korea, and India, providing job and business opportunities. Bayly has expressed concern that New Zealand’s ‘wait and see’ approach is hindering its growth in fintech, gaming, blockchain, and other sectors.
In 2021, the Cabinet Legislation Committee launched a crypto inquiry initiative, leading to findings that suggest New Zealand should adopt a more proactive and innovation-friendly approach to digital assets and blockchain, including cryptocurrencies. According to Bayly, the government needs to support industry development while also considering appropriate policies to manage risks associated with cryptocurrencies. The minister emphasizes the need for a more proactive stance from the government in approaching digital assets.
Data from the Financial Markets Authority (FMA) in 2022 revealed that about 10 percent of New Zealand citizens, roughly 324,000 people, owned cryptocurrencies. However, there have been no official updates on the number of cryptocurrency holders in the country since December 2022. Furthermore, New Zealand has yet to establish legal frameworks to oversee or regulate the crypto sector. This lack of regulation not only exposes the sector to exploitation by malicious actors but also creates opportunities for unlawful activities such as money laundering and terrorism financing.
In response to high-profile cases of digital and online scams that resulted in victims losing millions of dollars, the Committee launched the Scams Inquiry in 2022. Concerns were raised about the impact of these scams on victims’ lives, prompting a deeper understanding of how banking processes in New Zealand can better protect consumers. Bayly stresses the importance of addressing scams and fraud in the crypto space to safeguard consumers and prevent monetary losses.
Overall, Minister Bayly urges the government of New Zealand to take a more proactive approach in exploring digital assets and blockchain technologies. He also calls for more public debate and engagement to prompt further consideration and action by the government. This initiative aims to ensure that New Zealand is well-positioned to adapt to the opportunities, challenges, and risks associated with digital assets in the evolving landscape of cryptocurrencies.
The urgent need for New Zealand to embrace cryptocurrencies and develop a regulatory framework cannot be understated. By taking proactive measures and fostering public debate, the country can position itself as a leader in the digital asset space while mitigating risks and protecting consumers from fraudulent activities. It is crucial for New Zealand to act swiftly and decisively to capitalize on the potential benefits of cryptocurrencies while safeguarding its citizens from potential harms.