New Zealand fears missing crypto train with ‘wait and see’ approach

The New Zealand economy strategy-making body suggests becoming more open to advances in cryptocurrency. They presented various proposals to encourage the development of digital currencies in New Zealand.

Andrew Bayly, New Zealand’s Minister of Commerce and Consumer Affairs, suggested refreshing the country’s hesitant stance towards exploring and implementing digital assets and blockchain technology innovations. He encouraged the government to back the growth of the crypto industry and devise suitable regulations to address associated risks.

Bayly’s office replied to the Finance and Expenditure Committee’s questions concerning cryptocurrencies with the following statement:

“The current ‘wait and see’ approach could risk New Zealand missing out on the benefits of development in the digital asset industry.”

Eight crucial suggestions were put forward by the ministry’s experts for New Zealand to rejoin the global crypto trend. These proposals encompass creating favorable policies and regulations to foster advancements in digital currencies and blockchain technology, enhancing communication and partnership between the government and industry professionals, and attracting skilled workers in the field of digital assets and blockchain through immigration.

Recommendations including creating educational resources and training, offering tax incentives, implementing Anti-Money Laundering regulations, and designing an in-house central bank digital currency were suggested as more welcoming methods for dealing with cryptocurrencies.

Bayly emphasized that the majority of the suggestions put forward were geared towards the long term. He underscored the importance of a unified, international regulatory system and effective oversight mechanisms for managing digital and cryptocurrencies.

Bayly proposes a contrasting perspective to that of New Zealand’s Central Bank governor, Adrian Orr, regarding the implementation of a CBDC within the bank itself.

On the 12th of February, Orr testified before a parliamentary finance committee that Central Bank Digital Currencies (CBDCs) do not completely replace traditional paper money and are not yet stable.

New Zealand fears missing crypto train with 'wait and see' approach

According to Orr’s perspective, Bitcoin doesn’t function as a medium for exchanging goods and services, maintaining value over time, or serving as a measurement for financial transactions when addressing the apprehensions of the Reserve Bank of New Zealand (RBNZ) regarding cryptocurrencies. He further stated:

“Likewise stablecoins, I think, are the biggest misnomers […] Stablecoins are not stable. They are only as good as the balance sheet of the person offering that stablecoin.”

“The most important action we can take is to be open and straightforward with you. I must clarify that these are not regular currencies or cash issued by a central bank.”

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2024-04-10 11:52