The ministry of commerce and consumer affairs in New Zealand has received a stern warning to act swiftly on cryptocurrencies. Minister Andrew Bayly has emphasized the urgency for the country to finalize its stance on crypto before it’s too late. While countries like the UK, the UAE, the US, South Korea, and India are rapidly adopting the Web3 sector and reaping the benefits of job creation and business opportunities, New Zealand seems to be lagging behind. The ‘wait and see’ approach adopted by the country is hindering its growth in vital sectors such as fintech, gaming, blockchain, and more. In a bid to push for change, the Cabinet Legislation Committee initiated a crypto inquiry in 2021. Various findings from the inquiry have led Bayly to urge the government to embrace a more proactive approach towards cryptocurrencies.
Data from the Financial Markets Authority (FMA) revealed that approximately 10 percent of New Zealand citizens, around 324,000 people, owned crypto assets in 2022. Shockingly, the official statistics on the number of people holding cryptocurrencies in New Zealand have not been updated since December 2022. This lack of regulatory oversight leaves the country’s crypto sector vulnerable to exploitation by unscrupulous individuals and poses a significant risk in terms of facilitating illegal activities like money laundering and terror financing. The absence of legal rules governing the crypto sector in New Zealand calls for immediate action to safeguard the interests of its citizens and the integrity of the financial system.
In response to several high-profile cases of digital and online scams that resulted in victims losing substantial amounts of money, the Committee launched the Scams Inquiry in 2022. Concerns were raised about the negative repercussions of these scams on the lives of individuals and the necessity to enhance banking processes to better protect consumers in New Zealand. Minister Bayly has underscored the importance of taking proactive measures to combat fraudulent activities and ensure a secure environment for investors and consumers.
Bayly has called upon the government of New Zealand to adopt a more progressive approach towards exploring digital assets and blockchain technology. Furthermore, he has advocated for increased public discourse and encouraged the government to engage in further deliberations to position New Zealand favorably in adapting to the opportunities, challenges, and risks associated with digital assets. It is imperative for the country to prioritize the development of a robust regulatory framework that safeguards investors, promotes innovation, and fosters a thriving cryptocurrency ecosystem.
The urgent need for New Zealand to embrace cryptocurrencies cannot be overstated. The country stands at a crucial juncture where decisive action is required to unlock the full potential of digital assets and blockchain technology. By swiftly implementing regulatory measures, fostering innovation, and engaging in constructive dialogue, New Zealand can significantly enhance its position in the rapidly evolving cryptocurrency landscape. Failure to act promptly may result in missed opportunities, increased vulnerabilities to financial crimes, and a stunted growth trajectory for the country’s economy. Now is the time for New Zealand to seize the moment and embrace the transformative power of cryptocurrencies for the benefit of its citizens and the nation as a whole.
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