New Zealand’s ‘Wait and See’ Approach Raises Concerns of Missing Crypto Opportunity

New Zealand’s Ministry of Commerce and Consumer Affairs has proposed a more open approach towards cryptocurrency innovations in order to boost the growth of digital assets within the country. Andrew Bayly, the Minister of Commerce and Consumer Affairs, has recommended that the government support the development of the crypto industry and implement appropriate policies to manage associated risks. The ministry has made eight key recommendations, including the adoption of policies and regulations that encourage the development of digital assets and blockchain technology, fostering collaboration between the government and industry players, and addressing skills shortages in the digital assets and blockchain sector through immigration. Other recommendations include the development of training and educational resources, tax incentives, and the continuation of the design work on a central bank digital currency (CBDC). Bayly emphasized the need for a coordinated global regulatory approach and supervisory frameworks for digital and crypto assets, noting that most of the recommendations are long-term in nature. However, Bayly’s recommendation for an in-house CBDC contradicts the viewpoint of the New Zealand Central Bank governor, Adrian Orr, who stated that CBDCs are not a true substitute for fiat money and are not stable. Orr argued that Bitcoin is not a means of exchange, store of value, or unit of account, and referred to cryptocurrencies as speculative coins rather than currency or central bank cash.