Cryptocurrency: A View from NZ

New Zealand has long suffered from being a long way from anywhere. The Internet has gone some way to solve the tyranny of distance. Cryptocurrencies are the natural evolution of the internet and their use will be of immense use to New Zealand businesses and consumers.

New Zealand businesses and consumers in theory should have access to cryptocurrencies, such as Bitcoin, Ether and other alt coins just the same as businesses and consumers in the United States, Europe, Australia and elsewhere. Theory, however, is sometimes just that, theory. It is extremely hard to purchase cryptocurrencies using fiat currency in New Zealand.

LocalBitcoins.com is the primary way to purchase Bitcoin in New Zealand. It is ironic that to purchase Bitcoin, a technology that was designed to eliminate the need to trust the other party, you have to trust the person who you are paying fiat currency via a bank account to transfer the Bitcoin to you! There is currently no cryptocurrency exchange based in New Zealand. Well there is one, Cryptopia (www.cryptopia.co.nz), but you can't use fiat currency to purchase cryptocurrency on that exchange, you need cryptocurrencies to trade on the exchange. New Zealand businesses and consumers are unable to easily register accounts on Coinbase or similar exchanges, and/or if they do register accounts they are limited just to trading cryptocurrencies, not using fiat currency to purchase cryptocurrencies. The Internet has borders when it comes to New Zealanders!

Even if New Zealanders are able to obtain cryptocurrencies there are few places that will accept them in New Zealand. The reason: businesses who accept cryptocurrencies have their bank accounts closed down. So while Bitcoin and other cryptocurrencies cannot be closed down, if you are a business in New Zealand you need a bank account to operate.

To be clear, the use of cryptocurrencies is not illegal in New Zealand, it is just that they are very hard to get and then once you get them, to use in New Zealand. The banks claim that the KYC/AML (Know Your Customer and Anti-Money Laundering) requirements that they are under mean they cannot take the risk of their clients accepting cryptocurrencies as payment. Yet those same banks allow their customers to accept cash. Also, numerous people who sell Bitcoin on LocalBitcoins and elsewhere for fiat currency also have their bank accounts closed - so the logic does not quite work.

While some will say that regulation is bad and cannot be achieved, but for cryptocurrencies to be used on any scale in New Zealand regulation is required.