Cryptocurrency is growing in popularity globally and after the Covid19 crisis the digital currencies are bouncing back and New Zealand is no different. Bitcoin has maintained its strength and remains the biggest as both an investment opportunity and alternative option of payment. Today, several countries are planning to legalize the use of these digital currencies and one of them is New Zealand.
The central bank there known as Reserve Bank is studying and submitting an investigation related to crypto-currencies legalization and their contribution to the financial services. The Crypto industry is waiting for changes in terms of the legal status of this digital currency.
According to the supporters, cryptocurrencies are a source of innovation on the rise which not only guarantee to democratise financial markets but also keeps the payments at New Zealand online casinos found at CasinoDeps.co.nz secure and honest. In other words, this modernization offers a better store of wealth compared to the official currencies. As the Reserve Bank described these digital currencies as a devastating assessment of their contribution to the financial services market, adopting cryptocurrency requires an inquiry.
Actually, Parliament’s Finance and Expenditure Committee has launched a study regarding the impact, and risks of crypto-currencies. The crypto supporters claim the possibility of more regulation so the bank affirmed to support this innovation in the financial services provided that the related risks are prudently managed. The bank also added that the technology used in crypto-assets could stimulate healthy competition and further innovation. Nonetheless, this revolution shouldn’t avoid the application of the regulation or damage the trust in money and payments.
Those who are against the idea to adopt cryptocurrencies criticised that few users choose Bitcoin as a payment solution. They said that Bitcoin leads to cyber-crimes including ransomware. As stated by Marsh & McLennan Companies (MMC), an insurance broking and risk management giant, around 98% of ransomware demands were made in Bitcoin last year because it provides a high level of anonymity when transferring funds. As this digital Bitcoin is rarely used as a form of payment option, it can be difficult to describe it as a currency. In addition, cryptocurrencies don't appear to be the means of payment in businesses.
The Reserve Bank affirmed, “According to one survey, less than 100 New Zealand companies are currently accepting crypto-assets as a means of payment.” Therefore, before implementing new regulations, the committee and government agencies should cooperate with companies involved in the cryptocurrency industry. Their cooperation is based on imposing reliable laws regarding securities law, tax law, financial service provider law, anti-money laundering, and countering the financing of terrorism law.
Stablecoin is a type of cryptocurrency launched by Techemynt (a New Zealand registered Financial Service Provider or FSP). This token has become the world’s tenth most-traded by market value and inspires confidence globally. The banks in New Zealand were exceptionally concerned about stablecoins because not only are these cryptocurrencies backed by a legal claim on the central bank but they also haven't the same level of regulation as bank deposits. “Stablecoins are of particular concern for central banks worldwide, including the Reserve Bank,” the bank said. The enhancement of the regulatory toolkits to manage the risks posed by some forms of crypto-assets is, thus, crucial.
Chartered Accountants Australia & New Zealand (CA ANZ) required the Goods and services tax (GST) to be charged on purchases of crypto-currencies under current laws. According to the Financial Markets Authority, crypto-currencies are high-risk and highly volatile investments as the price can change very quickly. These digital currencies are not regulated in New Zealand so those who want to purchase them should choose a trading platform based on this country because this provides a minimum level of protection.
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