New Zealand Minister Calls for Overhaul of Digital Asset Regulations

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Ruholamin Haqshanas

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Ruholamin Haqshanas

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Ruholamin Haqshanas is a contributing crypto writer for CryptoNews. He is a crypto and finance journalist with over four years of experience. Ruholamin has been featured in several high-profile crypto...

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April 9, 2024

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The Minister of Commerce and Consumer Affairs of New Zealand, Andrew Bayly, has recommended a revamp of the country’s approach to digital asset regulation and the overall look on blockchain technology. Expressing concern over the sluggish pace of adoption and experimentation, Bayly called for government support in developing the crypto industry and implementing appropriate policies to manage associated risks.In response to inquiries by the parliamentary Finance and Expenditure Committee regarding cryptocurrencies, Bayly’s office highlighted the potential risks of New Zealand’s current “wait and see” approach, cautioning that it could hinder the country from reaping the benefits of digital asset industry advancements.

New Zealand’s Plan to Get Back on Global Crypto Wave

The ministry’s advisers presented eight key recommendations aimed at putting New Zealand back on the global crypto wave. These recommendations encompass adopting policies and regulations to encourage digital asset and blockchain development, fostering collaboration between the government and industry players, addressing skill shortages through immigration, and creating training and educational resources. Additionally, the recommendations propose tax incentives, Anti-Money Laundering provisions, and continued work on designing an in-house central bank digital currency (CBDC).

FOMO

Andrew Bayly, the Minister of Commerce and Consumer Affairs, cautioned against New Zealand's passive stance, emphasizing that it might result in overlooking the advantages of progress within the digital asset sector.

— Crypto with Vishal (@CryptoWthVishal) April 10, 2024

However, Bayly’s proposal for an in-house CBDC contradicts the viewpoint of Reserve Bank of New Zealand Governor Adrian Orr. 

During a parliamentary finance committee session, Orr stated that CBDCs are not a true substitute for fiat money and emphasized their instability.

Orr’s argument questioned the viability of Bitcoin as a means of exchange, a store of value, or a unit of account. 

He further criticized stablecoins, asserting that they are not truly stable and are solely reliant on the balance sheet of the entity offering them.

Orr concluded by emphasizing the importance of transparency in addressing the speculative nature of cryptocurrencies, clarifying that they are not official currency or central bank cash.

Bayly’s recommendations, while acknowledging the long-term nature of the changes, underscore the need for a coordinated global regulatory approach and supervisory frameworks for digital and crypto assets.

By advocating for a more supportive environment and proactive measures, he aims to position New Zealand as a participant in the evolving digital asset landscape.

New Zealand Increases Crypto Surveillance To Boost Digital Asset Regulation

Last year, the Reserve Bank of New Zealand noted that it is increasing surveillance of the crypto sector.The country’s finance watchdog has issued several such warnings against crypto fraudsters and impersonators.The regulator previously flagged Krypto Security and Bay Exchange, which have been contacting citizens to offer access to cryptocurrency services. Last month, New Zealand’s Financial Markets Authority (FMA) also flagged an unlicensed crypto exchange clone of BTCSWE. The impersonator has been reportedly contacting customers, promising to retrieve funds lost in previous unsuccessful investments.The country’s financial regulator added two fake entities to its warning list on Wednesday – BTCSWE and Grandeur Capital Pro.BTCSWE cryptocurrency exchange is a legit company licensed under the FMA. The regulators have contacted the owners of the firm, who confirmed that they “have been impersonated as part of a wider recovery scam”.