A New Zealand ministry focused on shaping the nation's economic strategy has proposed adopting a more accommodating stance towards cryptocurrency innovations. The ministry put forward several recommendations aimed at fostering the growth of digital assets within the country.
Andrew Bayly, the Minister of Commerce and Consumer Affairs of New Zealand, recommended revamping the country’s sluggish approach toward experimenting and adopting innovations on digital assets and blockchain technology. He urged the government to support the development of the crypto industry and consider appropriate policies to manage related risks.
In response to the inquiries by the Finance and Expenditure Committee into cryptocurrencies, Bayly’s office said:
“The current ‘wait and see’ approach could risk New Zealand missing out on the benefits of development in the digital asset industry.”
The ministry’s advisers made eight key recommendations for New Zealand to get back on the global crypto wave. The recommendations include adopting policies and regulations to encourage developments in digital assets and blockchain, facilitate greater collaboration between government and industry players and immigration to address skills shortages in digital assets and blockchain
Other recommendations — such as developing training and educational resources, tax incentives, Anti-Money Laundering (AML) provisions and continuing the design work on an in-house central bank digital currency (CBDC) — made it to the list of friendlier approaches to crypto.
Bayly noted that most of the recommendations are long-term in nature and highlighted the need for a coordinated global regulatory approach and supervisory frameworks for digital and crypto assets.
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Bayly's recommendation for an in-house CBDC contradicts the viewpoint of the New Zealand Central Bank governor Adrian Orr.
On Feb. 12, Orr told a parliamentary finance committee that CBDCs are not a true substitute for fiat money and “are not stable.”
Orr argued that Bitcoin (BTC) is neither a means of exchange nor a store of value or a unit of account when asked about the Reserve Bank of New Zealand’s (RBNZ) concerns about cryptocurrencies. He added:
“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 number one thing we can do is be as transparent and blunt as we can. They are speculative coins, not currency and not central bank cash,” he concluded.
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