Cryptocurrencies are fast becoming the default choice of many businesses throughout sectors across the globe. This makes it important to understand the legality of virtual money and how it should be used. Even though e-cash is a fairly new concept this does not change the fact that it needs to be regulated and controlled just like any other financial service. 

How Current Regulations Influence On Cryptocurrency

Although the New Zealand government does not currently have any legislation specifically for cryptocurrencies this doesn’t mean that the money transfer solution is allowed to be used fraudulently. The Financial Markets Authority considers virtual money a financial service and is expected to abide by fair dealing requirements which are laid out in the Financial Markets Conduct Act of 2013. 

Other laws which could be applied to the currency type include those businesses that make use of it and are also registered in New Zealand with retail clients. Some of the additional requirements that would apply to cryptocurrency operators include certain disclosure requirements, governance, and licensing. 

Online Gambling Using Cryptocurrency 

Virtual money is treated in much the same way as any other currency type when it comes to online gambling. Just like transfers with normal cash cryptocurrencies exchanges are considered ‘money changers’ that are subject to anti-money laundering and counter-terrorism financing laws. This means that when you gamble using bitcoins it is possible to encounter transfer fees at some casinos. In part, this is due to the fact that cryptocurrencies are treated as property by local laws to allow for income tax legislation. 

How Else E-money Can Be Used In New Zealand

In mid-2019 the NZ government made it legal to pay salaries to workers in cryptocurrency. This means that someone can receive their wages in the virtual currency then use it with retailers, sellers, and other businesses who accept the payment type without ever having to use traditional money. This proves that the New Zealand government is quickly adopting and integrating cryptocurrency into local financial systems which is a good sign for economic diversity. 

New Zealand is one of the most forward-thinking countries in the world when it comes to cryptocurrency. The government continues to bring forward new ways in which the money type can be used by both businesses and customers alike. Between the use of more and more electronic cash together with progressive laws and legislation, the future of the New Zealand financial market looks good.

Useful sources:

https://www.interest.co.nz/sites/default/files/embedded_images/Sims%20et%20al%20ILAPP%20Cryptocurrencies%20Findings%20Final%20Report%20Sep2018.pdf

https://casinohex.co.nz/online-casinos/bitcoin/

https://www.globallegalinsights.com/practice-areas/blockchain-laws-and-regulations/new-zealand