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Your Voice Matters for New Zealand’s Growing Blockchain Industry!

Last month, New Zealand’s Finance and Expenditure Committee launched a public inquiry to understand the impact of the growing blockchain industry in New Zealand.  The.

Posted August 25, 2021

Illustration of people speaking up in front of a government building on a purple background.
Illustration of people speaking up in front of a government building on a purple background.

Last month, New Zealand’s Finance and Expenditure Committee launched a public inquiry to understand the impact of the growing blockchain industry in New Zealand. 

The main concerns that they are considering are its impact on the environment, the economy, and how it can be integrated into the legal framework, such as taxation. Who better to ask about these questions than the Cryptocurrency Community?

This inquiry is an opportunity for us as members in the thriving blockchain industry to express our views about our work and ecosystem. By initiating a dialogue and debate around the topic, we are creating a chance for our blockchain industry in New Zealand to thrive and mature in a sustainable way. 

More importantly, we can help navigate public opinions and policymakers away from misconceptions that are harmful and false.

We firmly believe that this industry is capable of bringing immense benefit to financial markets, industry value chains, and personal data ownership in the digital economy. 

What can you do to help sustain the Kiwi Crypto Evolution?

As with any other technological innovations, public and government support is needed in order to grow a new economic sector within which the nascent crypto technology is embedded.  

New Zealand is already seen as a good place to do business; our home is a nurturing ground for technology innovators to invest in our economy and create more lightweight exports.

Now, we can help the country to take one step further and ensure that New Zealand is the most trusted market for doing business with the emerging crypto sector.

The Treasury and Expenditure Committee’s Inquiry will consider all submissions to form healthy opinions and recommendations for the government to act upon.

So let’s all get behind this! As a Crypto Community, we encourage you to make a response to this inquiry.

It is our view that the government and stakeholders do not yet understand how far this market has advanced, and how much it advances each day.

A significant response will highlight this. The response can take as little as 2 minutes to complete, and the closing date for submissions is Thursday, 2 September 2021.

How to submit a response to the inquiry

Head over to the inquiry page from the Parliament’s official website. When you respond, you will be asked to comment or respond to the following prompts:

  1. I/We wish to make the following comments
    • What do you think of the terms (see below)
  1. I/We wish to make the following recommendations
    • What would you like to see implemented in the industry?

We have some draft responses below you can use, or – write your own!

The terms mentioned here are:

  1. to inquire into, and establish the nature and benefits of cryptocurrencies:

a. to establish how crypto-currencies are created and traded

b. to understand the environmental impact of ‘mining’ crypto-currencies

c. to identify risks to users and traders of crypto-currencies.

  1. to identify the risks crypto-currencies pose to the monetary system and financial stability, including tax implications, in New Zealand
  1. to establish how crypto-currencies are used by criminal organisations
  1. to establish whether means exist to regulate crypto-currencies, either by sovereign states, central banks, or multilateral cooperation.

The following section provides some example responses. In parallel to your response, we will be responding to the Committee as a Cryptocurrency Asset Industry Group. With our collective effort, we can get politicians’ attention to create a great place for crypto and blockchain in NZ.

So – take 2 minutes and get your response to the Committee, as this shows your ongoing support for Easy Crypto and hundreds of local crypto-related businesses in NZ

Submit an inquiry: Click here to head over to the online submission form.

Our example responses to the inquiry 

These responses have been drafted by a group of stakeholders across the crypto and blockchain community, including Centrality, Techemy and Blockchain NZ.

1. I/We wish to make the following comments

The cryptocurrency market is a once-in-a-generation new asset class that is providing new infrastructure to improve the transparency, speed, and openness of the global financial markets. It is important that New Zealand doesn’t get left behind. 

Compliance regarding KYC / AML or other risk mitigation measures are important to retain NZ’s trusted market position. A focus on this area is already mandated via current KYC / AML laws and the industry is already working to ensure compliance is upheld. Several Kiwi companies are building compliance-focused solutions for Tax and KYC, specifically targeting this emerging market sector.  

Cryptocurrencies / Digital Assets / Blockchain markets are growing faster than any other asset classes or industry, and New Zealand should capitalise on this. 

The volatility of the cryptocurrency market is no different to that of any other emerging market. Market volatility in itself isn’t a reason to close down an emerging technology sector just as it has not been a reason to close down other financial markets. In the long run blockchains provide a level of transparency not found in traditional financial markets which could help reduce overall financial markets volatility. 

Governments should make sure responsible innovation is fostered but should be technology agnostic, winners and losers in technology innovation should be determined by markets rather than legislation. 

2. I/We wish to make the following recommendations

That the Committee seeks to understand from experts in the field the truth behind some of the misnomers about the environmental impact of some kinds of cryptocurrency networks.

Also to acknowledge that there are different types of algorithmic settlements for cryptocurrency which do not use large amounts of power to achieve network consensus. That, like most technology sectors, the industry is constantly innovating to mitigate its impacts on the environment.  

That the Treasury and Expenditure Committee should understand that cryptocurrency is a form of database technology and there are many types of assets and applications that can exist on it. The committee should seek to understand that cryptocurrency is not one single thing and as such care is needed when implementing policies and regulation as broad-brush approaches risk damaging innovation in unintended ways.  

That the Treasury and Expenditure Committee should retain the services of experienced people in this industry to ensure that lack of knowledge in a nuanced discussion is not an issue in terms of decision making. 

The Treasury and Expenditure Committee seeks to understand fully the market opportunity of cryptocurrency and blockchain architectures, how fast innovation is happening globally and how Kiwi companies can create more opportunities for investment, employment and innovation in New Zealand.  

That the Treasury and Expenditure Committee recognise and understand the work already undertaken by the Reserve Bank, FMA, and IRD who already have policies in place to guide the industry. That the best solution is for these agencies to continue to work with the industry to update and improve guidance as the industry evolves. 

That Treasury and Expenditure Committee understands that market innovation should determine technology winners and losers rather than intervention from policymakers 

That the Treasury and Expenditure committee recognise that as an emerging technology sector there is a tendency for over skeptical popular narratives, that this is a frequent feature of any new market innovation so it’s important to understand any biases they may have due to these narratives and seek to mitigate them.

The Treasury and Expenditure committee recognises that with any new technology there are incumbents who are being disrupted and as such there are vested interests in creating ways to block competition.

That the committee takes time to make themselves aware of these issues and the possible motivations behind these submissions. 

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Disclaimer: Information is current as at the date of publication. This is general information only and is not intended to be advice. Crypto is volatile, carries risk and the value can go up and down. Past performance is not an indicator of future returns. Please do your own research.

Last updated October 18, 2022

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