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.
Similar to hk and taiwan where bank would not comfortable in crytocurrency because they could not perform aml and kyc stuff on it. There is also lack of exchange causing a really high spread.
Same as I mentioned to the author of the article, have you ever considered mining it and selling it to the local population at a rate that would secure a reoccuring income?
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That is rather frustrating. Have you ever considered mining the crypto-currency yourself with energy efficient means locally?
You could produce and sell crypto-currency to the local population at a price that would secure you a reoccuring income.
I'm not so worried about the income side for me. Is rather that NZ businesses are being affected and can't compete on the same terms as, for example, US companies. Plus innovation is being hampered in NZ. Why would you start up a company in NZ that deals with cryptocurrencies when you are constantly worried about when your bank account will be closed down!
I see your point, you could arrange for funds to be traded out side the country some how.
Yes, you can send funds outside NZ, but it is a hassle and more expensive. Also, if you are a company, that is sufficiently big so that your bank won't close your bank account down, and you want to accept Bitcoin from online purchasers it is uneconomic to accept Bitcoin as payment. It is uneconomic because it would require you accepting Bitcoin, getting it converted in an overseas exchange to that country's fiat currency and then wiring that money back to NZ and changing it into NZ dollars. Also means that NZ businesses that sell online are missing out on business from people who don't have a credit or debit card, and there are a lot of those out there, particularly in China. (I've been told that only 12% of Chinese have credit cards - on reason why the payment mechanism in WeChat is so popular in China.)
I happen to have a particular interest in aquiring Solomon Island Dollars as well as New Zealand Dollars. Perhaps there is a way to reduce trading fees by involving multilateral trading between Canada and New Zealand.
I know tourism is popular in both our countries, there is potential to build a liquid online exchange that would be based in canada but offer payout options to international memers. To be honest, Japan has the best regulations for international trade in my opinion. www.kraken.com has had my business for years and its Japanese Accountants who manage that exchange, in the coming years I wouldnt be surprised if they added the Austrailian Dollar, thatcwould provide options for a multilateral trade between you and Australia.
Do you have any interest in working on a solution to this issue from an international stand point with me?
Probably the best person to speak to in NZ is Stephen Macaskill. Stephen is currently in the process of setting up an exchange in New Zealand, see eg: http://www.interest.co.nz/business/87670/founder-worlds-second-largest-digital-currency-urges-regulators-get-banks-stop. Alternatively there are the people behind the Cryptopia https://cointelegraph.com/press-releases/cryptopia-launches-new-zealand-dollar-tethered-cryptocurrency who launched the NZ dollar tethered cryptocurrency last month who might be interested.
(While I am very interested in cryptocurrency and the blockchain, it is more from an academic lens - not the day to day business side. I'm a legal academic and I'm currently doing a project on the legal regulation of cryptocurrency in New Zealand and Australia - funded by the NZ Law Foundation - that's when I'm not doing presentations etc on blockchain. In NZ in particular there is a real lack of knowledge about cryptocurrencies and the blockchain, even amongst people you would think would have some knowledge including the majority of people in government departments.)