- New Zealand ministry proposes a more open approach to cryptocurrency, aiming to spur digital asset growth.
- Recommendations include policy adoption, industry collaboration, addressing skills shortages, and exploring a central bank digital currency (CBDC).
- Contrasting views on CBDCs between Minister Bayly and Reserve Bank Governor Orr, emphasizing the speculative nature of digital coins.
A ministry in New Zealand, tasked with guiding the country’s economic policies, has suggested a more open approach to cryptocurrency advancements. This body has put forward various proposals aimed at encouraging the expansion of digital assets within the nation.
Andrew Bayly, New Zealand’s Minister of Commerce and Consumer Affairs, has advocated for an overhaul of the nation’s cautious tactics regarding the exploration and adoption of digital asset and blockchain innovations. He has called on the government to back the growth of the cryptocurrency sector while devising suitable measures to address associated risks.
Responding to the parliamentary Finance and Expenditure Committee’s investigations into cryptocurrencies, Bayly’s office remarked that continuing with a cautious strategy might lead New Zealand to miss the opportunities.
“The current ‘wait and see’ approach could risk New Zealand missing out on the benefits of development in the digital asset industry.”
Andrew Bayly, the minister of commerce and consumer affairs, New Zealand
The ministry’s advisers put forward eight principal suggestions to help New Zealand reengage with the international momentum on cryptocurrencies. These suggestions emphasize the need for adopting policies and regulations that would foster advancements in digital assets and blockchain technology, enhance collaboration between the government and industry stakeholders, and tackle skills shortages in the digital assets and blockchain sectors through immigration.
Additional proposals aimed at promoting a more crypto-friendly environment were also included, such as the creation of training and educational materials, the implementation of tax incentives, enhancements to Anti-Money Laundering measures, and ongoing efforts to develop an internal central bank digital currency (CBDC).
Bayly acknowledged that the majority of the proposed recommendations are designed with a long-term perspective in mind, underscoring the importance of a globally coordinated regulatory and supervisory framework for digital and cryptocurrency assets. He also mentioned the need for developing an internal central bank digital currency (CBDC), a stance that diverges from the views of Adrian Orr, the Governor of the Reserve Bank of New Zealand.
On February 12, Orr expressed to a parliamentary finance committee that CBDCs do not effectively replace fiat currency and criticized them for their instability. When discussing the Reserve Bank of New Zealand’s stance on cryptocurrencies, Orr stated that Bitcoin fails to serve as a means of exchange, a store of value, or a unit of account.
He further criticized stablecoins for their misleading sense of security, pointing out their stability is contingent upon the financial health of their issuers. Orr emphasized the speculative nature of these digital coins over their utility as currency or central bank-issued cash, advocating for clear and direct communication on these issues.
