MPs to put a spotlight on cryptocurrencies

Parliament’s Finance and Expenditure Select Committee launches inquiry into 'the current and future nature, impact, and risks of cryptocurrencies'

13th Jul 21, 11:14am by Gareth Vaughan

Parliament’s Finance and Expenditure Select Committee is launching an inquiry into "the current and future nature, impact, and risks of cryptocurrencies."

Labour MP Duncan Webb, chairman of the committee, says the inquiry will provide a good opportunity to further members' understanding of an increasingly important area.

The terms of reference for the inquiry are:

• To inquire into, and establish the nature and benefits of cryptocurrencies:
• To establish how crypto-currencies are created and traded.
• To understand the environmental impact of ‘mining’ crypto-currencies.
• To identify risks to users and traders of crypto-currencies.
• To identify the risks crypto-currencies pose to the monetary system and financial stability, including tax implications, in New Zealand.
• To establish how crypto-currencies are used by criminal organisations.
• To establish whether means exist to regulate crypto-currencies, either by sovereign states, central banks, or multi-lateral co-operation.

Webb says committee members look forward to engaging with some of New Zealand’s cryptocurrency experts. He says the committee will make further announcements on the dates and nature of the inquiry "in due course."

The inquiry follows a motion from committee member, Labour MP and former President of the New Zealand Police Association, Greg O’Connor.

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64 Comments

by GV 27 | 13th Jul 21, 11:29am 1626132589

I hope they live-stream this.

by Galloleous | 13th Jul 21, 11:35am 1626132909

Get ready for a load of FUD and inadequate research from another inept government group.
I really hope they take a non bias approach to this, but that is a slim hope, as they depend on the fiat system for their income.
I also wonder if they will differentiate Bitcoin from all the other cryptocurrencies.

by GV 27 | 13th Jul 21, 11:56am 1626134171

We might get another "the internet is a series of tubes" meme out of it, but I'm not hoping for much more.

by Laminar | 13th Jul 21, 12:13pm 1626135193

Why would they treat bitcoin differently?

by Lanthanide | 13th Jul 21, 1:14pm 1626138879

Because unlike other cryptocurrencies of note, it doesn't have a use case.

by Laminar | 13th Jul 21, 1:35pm 1626140158

I believe its use case is as a high security means of transfer and settlement outside of the banking system and theoretically a store of value. Its use case has so far been a failure but so to with most coins.

by Lanthanide | 13th Jul 21, 2:46pm 1626144408

There's nothing that bitcoin doesn't do that other coins aren't designed to do faster, more efficiently and cheaper and with more security.

by Laminar | 13th Jul 21, 4:50pm 1626151816

Sure, but thats the case with hundreds of coins

by LASSET | 13th Jul 21, 6:34pm 1626158066

This statement makes no sense.

I imagine you meant to say, "There's nothing that bitcoin does..."

But that statement would still be entirely wrong.

by Rick.James | 13th Jul 21, 9:34pm 1626168842

Please do yourselves a favour and listen to Bitcoin audible podcast if you haven't.

Cheers.

by BitcoinNZ | 21st Jul 21, 10:15am 1626819330

Not true. Bitcoin is faster, more secure and cheaper to transact than any other blockchain. It’s capabilities are unmatched. Btc is not Bitcoin. BitcoinSV is the original and only chain that is Bitcoin

by Fluffybunny | 14th Jul 21, 9:24am 1626211479

I've never understood why we need a method of exchange outside a countries formal currency. Its all just a method of bartering at the end of the day.

For most people fiat cash is just a transaction on the short term, we don't hold huge cash savings. Money earned comes in, expenses go out. So the currency I want to use for the everyday comes down to ease of use and how widespread it is accepted. Your not going to replace your use of nzd to buy groceries, so for the average user why bother with another currency? Your work is never going to offer payment in multiple currencies, nor will IRD accept bitcoin for tax payments.

And as a store of value its useless when there is so much speculation,competition and lack of stability.

Original theory aside, I've always thought that cryptos are a nice idea, but never really clear on what (in practice) collective bitcoin owners are trying to achieve. Aside from, it's new tech, it's cool and it's rising in value.

by BitcoinNZ | 21st Jul 21, 9:51am 1626817903

Bitcoin is the only blockchain that scales and has utility. Also, btc is not Bitcoin

by Galloleous | 13th Jul 21, 2:17pm 1626142679

Bitcoin has a 12 year track record of being a reliable network, producing block after block with no changes to the hard coded base rules.
It has a completely decentralised development system with no one person in control of the network. There is a delicate balance between miners who secure the network and the also globally distributed node network who verify there have been no fraudulent transactions or other nefarious activities.
It also is the only crypto currency to have reached a 1 Trillion $ market cap, be recongnised as a national currency in El Salvador, has significant institutional investment and is allowed to be custodied by American Banks.
It is leagues beyond any other cryptocurrencies with Ethereum being the next closest competitor, and that is still in beta phase with constant and significant changes to both its base operating code and emission schedule.
Anyone can create an ERC20 based token today and that would be considered a crypto currency (5000 and counting), yet you are asking what is the difference between Bitcoin and the rest of them.

by Laminar | 13th Jul 21, 5:04pm 1626152660

To be fair I was asking it rhetorically. Ethereum for example could well be significantly better than bitcoin and all of your arguments are simply scales, and a line drawn on a scale is arbitrary. All you have actually done is explain why bitcoin will be treated like any other crypto, which is obvious and why I asked rhetorically. Good shilling though, keep it up.

by Galloleous | 14th Jul 21, 9:16am 1626210993

Ethereum will never be hard money like Bitcoin, have you seen a chart of its emission schedule? looks like a kid drew a squiggle on a chart haha , but if it does try to be a hard capped asset, it is still going to take 12 years to just get to the point of trustworthiness that Bitcoin is a today:
"It is leagues beyond any other cryptocurrencies with Ethereum being the next closest competitor, and that is still in beta phase with constant and significant changes to both its base operating code and emission schedule."

by BitcoinNZ | 21st Jul 21, 11:05am 1626822356

This is categorically false. Btc added P2SH, RBF, cltv, csv. Btc added segwit which segregates digital signitures.
A coin is described as a chain of digital signitures. Btc devs have fundamentally changed the ruleset and no longer follows the Bitcoin White Paper so cannot be Bitcoin anymore. That is centralised. Only BitcoinSV has a locked in protocol so no one can change the ruleset which makes it the only chain that is not central planned.
Also btc has about a 2mb block size. No capacity for nz adoption, never mind the globe

by brisket | 13th Jul 21, 12:15pm 1626135318

As soon as I hear someone use the term 'FUD', I stop taking them seriously. It's like advertising the fact you're in a cult and any criticism of it will upset you.

by frazz | 13th Jul 21, 12:27pm 1626136078

I guess you say the same with FOMO as well - or LOL - or WTF...?

by Final Account | 13th Jul 21, 1:09pm 1626138548

This. For example the Bitcoin sub on Reddit is a goldmine for glorious nuggets of nuttiness.

by Lanthanide | 13th Jul 21, 1:19pm 1626139154

Eh. FUD is often used wrongly when referring to an opinion that is genuine criticism, but a lot of 'criticism' is just factually wrong, or taken from an extremely biased/pessimistic point of view and not based on a fair assessment of the facts. Such criticism as this is sometimes due to ignorance, but more often due to plain spite, mixed with ignorance (ie, not knowing what they don't know, and not caring to know out of spite).

That is to say, most 'criticism' of cryptocurrencies is in fact FUD and not something grounded in facts. By taking the approach of "anyone who says the word FUD is in a cult" you're leaping to the same sort of extreme as people who post FUD themselves are doing.

by Galloleous | 13th Jul 21, 1:55pm 1626141324

There is a difference between well researched critiques, compared to click bait hit pieces with a clearly bias undertone.
I am confident in the depth and breadth of research I have carried out over the last 5+ years

by J.C. | 13th Jul 21, 4:13pm 1626149617

As soon as I hear someone use the term 'FUD', I stop taking them seriously

While I understand what you're saying, it's pretty clear (to me anyway) that there is an orchestrated propaganda campaign against crypto. Call me paranoid or whatever, but I'm with the ultra orthodox on this one.

by ham n eggs | 13th Jul 21, 12:56pm 1626137775

"...as they depend on the fiat system for their income..."

Everyone does
Thats the point Bitconners choose to ignore
The system is insolvent and requires never ending leverage and debt growth
take it away and you decimate any sense of a supply chain

by Galloleous | 13th Jul 21, 2:23pm 1626143011

I take it you have heard of the Cantillon effect? There is definitely a big difference between how reliant on the money printer different positions/jobs are on the money printer going Brrr.
Money is all a faith system, and I have a lot more faith in hard coded maths that can not be changed without my permission than I do in fiat currencies that can be printed, devalued and controlled at the whim of a small number of elites who think they know what is best.
No doubt it will take time for a circular Bitcoin economy to develop, and I am happy to wait.

Um I think your last 2 points are describing the current system...?? Ever decreasing interest rates anyone.

by ham n eggs | 13th Jul 21, 2:43pm 1626144220

Yes
the last two sentences describe the current system ... it will only hold until faith breaks - which physical problems in supply chains will force...

But if you think there can be a working supply chain delivering Ranger Utes without fiat debt, you're dreamin
A "circular" economy (even if possible) immediately implies simplicity ... local and basic

by ham n eggs | 13th Jul 21, 2:45pm 1626144342

can Bitcoining fix this ...
https://www.smh.com.au/world/middle-east/a-country-running-on-empty-leb…

by frazz | 13th Jul 21, 2:51pm 1626144689

"Everything for the average Lebanese is becoming expensive, as their salary doesn’t change but the value of their salary is becoming worse every single day. I feel I am a slave in my own country.”
Sounds familiar - your beloved FIAT working its magic

by Lanthanide | 13th Jul 21, 3:45pm 1626147907

Since pretty much nothing is priced natively in bitcoin, when bitcoin's price swings by 10%+ in one day, the prices of goods using bitcoin also adjusts.

by ham n eggs | 13th Jul 21, 3:46pm 1626147972

well its EVERYONES beloved fiat cos thats what puts weetbix on the table ...

You never said how Bitcoining solved this problem....

by frazz | 13th Jul 21, 4:34pm 1626150899

Easy - just convert Lira to BTC - job done no more debasement

by ham n eggs | 13th Jul 21, 9:07pm 1626167223

Really?
The supply issue is caused by debasement.... right

by linklater01 | 13th Jul 21, 3:39pm 1626147572

ham n eggs,

A great shame. My Egyptian cousin once gave me a bottle of Chateau Musar-a wonderful wine.

by ham n eggs | 13th Jul 21, 3:47pm 1626148046

is indeed
But NZ should not be smug
There are serious freight / supply issues on the horizon

by Galloleous | 13th Jul 21, 4:15pm 1626149718

https://saifedean.com/podcast/bitcoin-in-lebanon-with-thomas-semaan/
Might be able to give you some ideas.
Saifedean has talked many times about how Bitcoin can help struggling countries, especially his home country of Lebanon.

by ham n eggs | 14th Jul 21, 9:39am 1626212369

So summarise it for us in a nutshell please....

Because I just cant see how anything can magically conjure resources to trade / energy surplus with pixels

by Binny | 13th Jul 21, 6:29pm 1626157750

Dont we all rely on the fiat system for our income?

by Carlos67 | 13th Jul 21, 8:00pm 1626163240

....and then we take that fiat income to buy Bitcoin. Anyone should be able to see an immediate problem with that.

by BitcoinNZ | 21st Jul 21, 9:49am 1626817754

As they should as everything else is basically a security. Also BTC is not Bitcoin

by Audaxes | 13th Jul 21, 11:55am 1626134111

Ransomware: Stop Blaming Russia And Tackle The Real Villains - Cryptocurrencies

by Galloleous | 13th Jul 21, 1:00pm 1626138007

haha blaming a means of payment for their security flaws. Its not like hacking and ransom demands were non existant before cryptocurrencies were around.
And criminals are usually the first to adopt new technology because it is better than the legacy system, and regulators are behind the 8 ball.

"Cryptocurrencies are almost entirely used for illicit activity, gambling and investment frauds, and on the whole have no upside for society at large while also having unbounded downside and massive negative externalities." tells me all I need to know about the authors opinion to not take it seriously. It means they have done minimal research.

by kaczor47 | 13th Jul 21, 5:21pm 1626153716

Street Violence: Stop blaming offenders and tackle the real villains - Baseball (bats)

by tim52 | 13th Jul 21, 12:28pm 1626136085

I don't know if anyone here is using Binance but this could be the time to move your assets to another exchange.
https://finance.yahoo.com/news/clear-junction-no-longer-facilitate-1810…

I also can't imagine Labour looking favourably on mining either.

by J.C. | 13th Jul 21, 12:49pm 1626137373

In many ways, this is 'non-news.' Furthermore, NZ banks (except ASB) will not facilitate payments to credible Aussie exchange Independent Reserve. Of course banks don't mind payments to dubious financial instruments for which they get a cut of the action. The regulators are running scared, not protecting people.

by tim52 | 13th Jul 21, 1:44pm 1626140688

In what way is this non news? Should people not expect crypto to be liquid or that no one can transfer from Binance to NZ anyway?
There is more to this story but if you don't agree that a crackdown on being able to cash out and and others buy in is bad then there is zero chance of accepting the rest.

Is the select committee timing just a coincidence to the crypto people here?

by J.C. | 13th Jul 21, 2:10pm 1626142228

There is more to this story but if you don't agree that a crackdown on being able to cash out

It appears you didn't read or understand the content you posted. Banks have no issue with accepting funds from Binance.

by tim52 | 13th Jul 21, 3:54pm 1626148481

Just skimmed the top paragraph, looking for a source. It was last week you could not withdraw, I have not kept up.
https://www.cnbc.com/2021/07/08/binance-uk-crackdown-boosts-rival-crypt…

This is a global anti money laundering crackdown, if your fine with this risk when there are alternatives not being hit by regulators. Currently being able to withdraw from a non compliant exchange makes this less bad, I guess.

Edit:
Article from to today: Clear Junction "decided to suspend both GBP and EUR payments and will no longer be facilitating deposits or withdrawals"
https://decrypt.co/75770/binance-dropped-european-payment-processor-cle…

by Zack Brando | 13th Jul 21, 2:20pm 1626142842

The future of Tax is Roman Style; 'Land Tax' and perhaps GST.

by JRSNZ | 13th Jul 21, 5:42pm 1626154944

A Dominic Frisby fan?

by JRSNZ | 13th Jul 21, 12:47pm 1626137276

I am actually looking forward to making a submission on this.

by J.C. | 13th Jul 21, 12:53pm 1626137621

Why? The inquiry will be shallow. They don't have enough people and time to do this properly. The only submissions they will take notice of are those that fit within vested interests. I expect some of the ultra orthodox will come out with some wild submissions but they will be treated much like the religious zealots promoting salvation through Christ on crowded city streets.

by JRSNZ | 13th Jul 21, 2:01pm 1626141672

I have vested interests.

by J.C. | 13th Jul 21, 2:13pm 1626142421

Within 'their' vested interests. BTW, the NZ Super Fund has invested in Gemini. I wonder if any negative outcomes will require the Fund to liquidate that investment. I know it's not a cypto investment, but it's essentially an investment into the technology developments built around crypto.

by paully | 13th Jul 21, 2:22pm 1626142930

Me too, I mean the counter factuals are going to be great. How being beholden to 4 Australian owned banks is better for our financial stability and monetary system. How NZD Fiat is being used by criminal organisations.

by Galloleous | 13th Jul 21, 2:25pm 1626143131

Or how the police have absolutly no idea how to even look after the few Bitcoin they have lol:
https://www.nzherald.co.nz/nz/criminals-steal-45000-in-bitcoin-during-p….

by J.C. | 13th Jul 21, 2:28pm 1626143330

Not your keys, not your coins

by kaczor47 | 13th Jul 21, 5:16pm 1626153388

Has China banned Bitcoin today yet? If so, how will Jacinda react?

by scarfie | 13th Jul 21, 5:37pm 1626154656

Why do they need a select committee when they can find all the experts on the forum at interest.co?

by J.C. | 13th Jul 21, 6:31pm 1626157884

Select committees are not made up of 'experts.'

by Rick.James | 13th Jul 21, 9:37pm 1626169048

There is a large fiat bubble.

Bitcoin is the pin.

by Rick.James | 13th Jul 21, 10:02pm 1626170565

by AKLCrusader | 14th Jul 21, 8:20am 1626207653

No time to investigate why Treasury makes guesses to support Labours budget house growth estimate shemozzle, but lots of time to "establish how crypto-currencies are created and traded".

My confidence in a Labour committee to shed light on anything crypto is Nil, and I rather suspect their intent is to look for a way to tax Crypto, expect a pointless and outcome free inquiry.

by NZstays | 14th Jul 21, 4:52pm 1626238358

NZ are so progressive that they will most likely accept bitcoin as legal tender well before most other countries. But the banks will resist until they can make money from it, and the only way they can make money from it will be in the form of fees - I'm ok with that.

by BitcoinNZ | 21st Jul 21, 10:11am 1626819069

Bitcoin was designed to fit into existing laws and regulations and tracing laws. It is a transparent, immutable, public ledger. It is a commodity and money. Bit(data) Coin(money), Bitcoin is the most efficient data management tool that has ever been invented. Is was designed for small casual transactions that out competes payment processors such as paypal, visa and mastercard and can do that today. This was all outlined in the technical paper called the Bitcoin White Paper. There was only ever supposed to be Bitcoin not thousands of different coins that do almost absolutely nothing when it is far more logical and efficient to use one global blockchain. Bitcoin can do anything all other blockchains are trying to achieve but magnitudes better.
BitcoinSV is the only chain that directly follows the White Paper and what SN described as the original Bitcoin. BSV is Bitcoin, not btc, not bch. Bitcoin(BSV) has more activity and more transactions than any other blockchain. In about 2 weeks time Bitcoin(BSV) will be doing more transactions than all cryptocurrencies combined. Btc does approx 5-7 transactions per sec (tps) BitcoinSV does 50000-100000 tps. I am only scratching the surface here on Bitcoins history and what Bitcoin is. I am happy to answer any questions. This will all become clearer to all very soon. Also, bitcoin.org the original bitcoin website can no longer host the Bitcoin White Paper in the UK and point it towards btc as btc is not Bitcoin. This is just the beginning, COPA is next