'I think we should embrace it:' Bayly spruiks crypto currency trading for NZ

Technology / news

New Zealand should take a commercial approach to crypto currency trading and embrace it, minister Bayly says

8th Feb 25, 2:37pm by Juha Saarinen

The Minister of Commerce and Consumer Affairs, Andrew Bayly, has come out strongly in favour of crypto currencies, saying New Zealand should be a trading platform for them.

Bayly made the remarks to the New Zealand Herald's Liam Dann, at the recently held Financial Services Council's Outlook 2025 conference.

"Cryptocurrency is obviously here to stay, and so that's one thing," Bayly said in a response to a question from the audience about taking crypto currencies mainstream, and if that should be accelerated and perhaps deregulated in New Zealand.

"President Trump has obviously really pushed it, which is fascinating," Bayly said.

Trump launched a so-called memecoin the day before his inauguration as United States president. Called $TRUMP, the crypto currency token could be used to buy Trump-themed trainers, fragrances and watches.

Investors who piled in on the coin pushed its perceived value to over US$75 per token, for a "market capitalisation" of US$14.5 billion. It has since dropped precipitously in value to US$16 per token.

Trump has also endorsed the World Liberty Financial crypto currency project, with Bloomberg reporting it would be used to set up a "strategic reserve", the objective of which isn't specified. The Trump family are allegedly acting as advisers to the WLFI project and have been allocated 22.5 billion of its tokens.

Bayly now believes New Zealand should espouse virtual currencies.

"I think and I was on [the] finance and expenditure [committee] and we actually commissioned the review of cryptocurrency and blockchain all that sort of technology - I think we should embrace it," Bayly said.

"There's real opportunities in it you know. Obviously we have some people that trade cryptocurrency, but I think the real opportunity actually is is New Zealand being a trading platform," the Minister added.

He held out the example of the United Arab Emirates (UAE) in the Middle East as a crypto currency trading platform. The country hosts several cryptocurrency exchanges, both local and US-based ones, and Bayly believes this represents a real commercial opportunity.

Bayly said that while you don't have to go and promote certain crypto currencies, somewhere they have to be legitimately traded, and he is quite embracing of some of that.

The Minister also said blockchain, the immutable distributed digital transaction ledger introduced with the Bitcoin cryptocurrency is "fantastic technology if you want to deal with anti-money laundering (AML)".

"Some of you would have made a lot of money trading cryptocurrency and that's their height of risk but you know, I think we've got to look at the commercial opportunities," Bayly said.

"That's why government should think commercially rather than thinking about all the rules we've got to put in place," he added.

Anti-scam action promised in collaboration with Australia and Singapore

Bayly took a swipe at the social media platforms on which scams, including "celeb-bait" ones that trick people into buying crypto currencies, saying he wants them to act locally in New Zealand.

"What are you doing to stop scams in New Zealand?" Bayly asked rhetorically, saying the social media platforms efforts are normally at a global level.

The Minister revealed that while losses to scams are officially said to be around $200 million last year, the number is much higher, maybe as much as a billion dollars.

He said he has asked social media platforms, the telcos and the banks to have a code prepared, or Bayly will impose one on them.

Bayly also warned the FSC audience not to use their regular credit and debit cards on Temu and Facebook Marketplace "because that's where you'll get scammed, most likely" and to be careful on them to avoid having their accounts emptied.

Plenty of work to do across Bayly's portfolio

Bayly has set an ambitious programme of work for himself and his ministry, embarking on regulatory reform in a range of sectors including banking, the supermarket duopoly, the Companies Act and capital markets, and the Accident Compensation Corporation.

Bayly was given ministerial responsibility for ACC earlier this year, after a cabinet reshuffle in January.

He's aiming to inject more competition into the economy. This will in part be done by updating the mergers and competition provisions of the Commerce Act, which Bayly said hasn't been reviewed in 20 years.

An independent review has been commissioned to take stock of the Commerce Commission's structure and effectiveness, as Bayly focuses on competition.

A review of the Fair Trading Act (FTA), described by the Minister as a "major piece of work," will be launched this year, Bayly said.

The FTA is "a hugely consequential piece of legislation that covers everything from product safety and product descriptions through the contract terms and advertising statements," Bayly added.

He noted that "it's very important that we actually make sure we're getting better outcomes" from the FTA.

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43 Comments

by J.C. | 8th Feb 25, 5:43pm 1738989833

Meaningless really. Despite a few dinky options for onboarding - like Easy Crypto, which is not a trading platform. It's a broker - punters either have to go to the likes of Binance or DEXs if they want to trade crypto. Also, it's too much work for the govt to put in a robust regulatory framework like Japan has done for their ecosystem. The addressable market is much larger.

If Bayly wanted to push for favorable tax treatment for crypto owners and trades, that would be looked on with favor by some. But he won't do that as his mates won't like it - the banks, tradfi industry, Ponzi, etc.

Best for Bayly not to do anything. Govts cannot shape crypto in a manner in which they like.

by 21Trillion | 8th Feb 25, 4:21pm 1738984897

100% agree. The few dinky options are actually because of the failure of the comcom to pull banks up on their anticompetitive behaviour by refusing services to the industry.

No crypto native will move to NZ, first hand all the ones I know that work in the industry apart from one have departed.

Plus the ponzi remains the capital gain haven. IRD have assumed that capital gains in crypto are to be taxed, end of conversation. Corrupt

by ThoughtsAndTorts | 8th Feb 25, 5:15pm 1738988141

For sure, NZ approach to crypto is a joke. Move offshore (even if only briefly) and do it there would be my suggestion to anyone interested in the area.

by Jack Lumber | 8th Feb 25, 3:05pm 1738980309

Great - let’s get rich trading pudgy penguins - Yeah right.

by Zwifter | 8th Feb 25, 3:21pm 1738981268

Yeah quite funny, people laugh when it comes to selling houses to each other but selling worthless tokens to each other is okay.

by J.C. | 8th Feb 25, 4:06pm 1738984017

Great - let’s get rich trading pudgy penguins - Yeah right

Bayly makes no point that he thinks trading Pudgy Penguins will make you rich. Where and how do you infer that?

Odds are that most people will lose money on Pudgy Penguins. But that doesn't mean you should prevent people from speculating on it.

Reality is that crypto markets are the closet we have to 'free markets'. Yes, there are instances of market manipulation. But you have that everyday in the stock, forex, and commodity markets. Even the Ponzi. Therefore, there is no argument to treat crypto any differently in terms of enabling people to access markets. But Aotearoa doesn't need a crypto industry per se. Doesn't make any sense.

by rastus1 | 8th Feb 25, 4:02pm 1738983770

Thoought id check his cv to see if I should bother……gulp - it’s impressive!

by Squishy | 8th Feb 25, 4:12pm 1738984352

Crypto exchanges should be subject to the same AML/CFT, KYC, consumer protection etc. laws as banks. I don't want this to be a backdoor for drug dealers, terrorists and kiddie fiddlers to sidestep two decades of legislation that keeps Kiwis safer.

by 21Trillion | 8th Feb 25, 4:17pm 1738984669

They already are, and are subject to harsher compliance than traditional finance.

NZ crypto scene is dead as banks collectively refuse to provide banking services to crypto businesses regardless of the level of compliance provided by the crypto business.

by J.C. | 8th Feb 25, 4:45pm 1738986347

Crypto exchanges should be subject to the same AML/CFT, KYC, consumer protection etc. laws as banks

Already done in Japan under the Travel Rule

Cryptocurrency exchanges in Japan are required to:

Register with the Financial Services Agency (FSA)
Implement strict Know-Your-Customer (KYC) checks
Adhere to traditional Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) responsibilities

by 21Trillion | 8th Feb 25, 4:19pm 1738984772

Really too little too late. NZ Crypto business scene has been slaughtered by banks collectively refusing services to startups and any crypto based service. NBR has reported on this a few times over the last 2 years.

Plus, if you are crypto rich and looking to move specifically to a crypto friendly country, NZ is very far down on that list. The taxation is horrific and the IRD are taxing capital gains, who would've thought.

by J.C. | 8th Feb 25, 4:48pm 1738986524

Plus, if you are crypto rich and looking to move specifically to a crypto friendly country, NZ is very far down on that list. The taxation is horrific and the IRD are taxing capital gains, who would've thought.

Correct. If you're crypto rich, you need to set up your affairs accordingly so that you're not liable for tax in Aotearoa. Tax alone is enough to scare most normies away.

by Juha Saarinen | 8th Feb 25, 5:49pm 1738990159

Curious as to why crypto currency shouldn't attract capital gains tax?

by IT GUY | 8th Feb 25, 5:44pm 1738989844

Do gains on normal FX currency attract capital gains tax?

by Juha Saarinen | 8th Feb 25, 5:52pm 1738990338

Don't quote me on it, but I believe if it's trading activity, then yes, it does.

by Chaosinflesh | 8th Feb 25, 5:54pm 1738990497

From speculation, I'm pretty sure the answer to that is "yes". At least, my clients paid tax on it, but maybe they were wrong to?

Until they got greedy and then lost it all in one of the ever-increases instabilities caused by high-frequency trading!

by IT GUY | 8th Feb 25, 6:06pm 1738991214

If they paid tax on a profit they can claim a loss...

by Chaosinflesh | 8th Feb 25, 6:13pm 1738991611

Yes. But still covered under tax rules.

Profit one year, loss another. Just like any normal business (except RE of course).

Note I'm not an accountant - my job was implementing other people's ideas for FX speculation.

by J.C. | 8th Feb 25, 5:48pm 1738990136

Many reasons.

1.Privacy Concerns: Cryptocurrencies offer pseudonymity, and taxation could compromise this key feature, deterring users who value privacy.

2. Impact on Innovation: Taxation may discourage technological advancements and adoption of blockchain technologies by making crypto less attractive.

3. Complexity and Enforcement Challenges: Crypto's decentralized nature and lack of uniform regulations make tax compliance and enforcement difficult, increasing administrative burdens.

4.Economic Costs: Taxing crypto could erode the tax base due to potential losses from crypto investments being offset against other income, creating unintended consequences for govts.

5. Global Nature of Transactions: Crypto transactions often occur across borders, complicating the determination of tax jurisdiction and enforcement.

by Juha Saarinen | 8th Feb 25, 5:53pm 1738990417

So... no KYC/AML and definitely no regulation with investor protection?

by J.C. | 8th Feb 25, 6:08pm 1738991312

It already exists in some jurisdictions such as Japan (as I harp on about) and Singapore. The US is a shambles because there has been no congressional action and the issue outsourced to the likes of the SEC to take the industry down. Aotearoa and Aussie are even further behind the 8 ball.

by 21Trillion | 8th Feb 25, 7:00pm 1738994417

Because we don't have a capital gains tax in NZ. The IRD say it's based on what you plan to do or the intent.

Yet we conveniently ignore the mass amounts of capital gains realised in property investment in NZ. It's one opinion for one asset class, and another the Bitcoin/crypto.

It's clear if your intent is a day trader vs someone accumulating Bitcoin as a store of value or long term accumulation.

Property investors on here seem to be calling bottom of the market, higher prices and so on, but if they have 0 intent of ever selling, why is this a win for them? Their yield to investment value declines, rates increase and so does insurance.

This whole country has agreed to turn a blind eye to the blatantly obvious and screw over anyone that doesn't funnel their money into it property.

Hence, a propped up Ponzi.

by J.C. | 8th Feb 25, 7:45pm 1738997136

More than a few countries have no capital gains on crypto:

Switzerland - Complete exemption from capital gains tax on cryptocurrency investments for private investors. The country's decentralized tax system allows cantons to set their own policies, with some regions offering even more favorable rates for crypto enthusiasts.

Singapore - Does not impose capital gains tax on cryptocurrency transactions, whether for personal or business purposes.

Germany - offers a unique tax benefit for long-term crypto holders. Cryptocurrency sales are tax-free if assets are held for more than one year. For short-term gains (assets held less than a year), profits are only taxed if they exceed €600.

Portugal - While Portugal recently introduced some crypto taxation, it remains relatively crypto-friendly. Cryptocurrency gains from long-term holdings are exempt from capital gains taxes. However, as of 2025, short-term gains (assets held for less than a year) are taxed at a flat rate of 28%.

Malta (the "Blockchain Island") - Exempts long-term holdings of cryptocurrencies from capital gains taxes. Has a well-defined legal framework for cryptocurrencies, ensuring stability and predictability for investors.

El Salvador - Exempts Bitcoin profits from capital gains taxes.

Georgia - for individual investors, Georgia is completely crypto tax-free, with no income tax on profits from sales and no capital gains tax applied.

Hong Kong - Does not levy a capital gains tax on private investors, regardless of the asset category.

Malaysia - does not classify cryptocurrencies as a store of value or capital assets, resulting in no tax on capital gains from crypto.

United Arab Emirates - Tax-free for cryptocurrency investments

by Let me be Frank | 8th Feb 25, 5:31pm 1738989063

Isnt the whole point of crypto to avoid government reach?

Something very odd is happening when the establishment is advocating for the anti-establishment.

by J.C. | 8th Feb 25, 5:51pm 1738990285

Agree. He's just trying to appear like he's knowledgeable about Innovation and the future of money.

by ThoughtsAndTorts | 8th Feb 25, 6:12pm 1738991535

The internet disrupted traditional media and communication and the world is still being reshaped by this.

Crypto is disrupting traditional money and finance and the world is still being reshaped by this.

One way or another, NZ will get onboard with crypto in the same way traditional media "got onboard" with the internet. It had to get onboard eventually, that is the nature of disruptive technology.

The real question is do you get ahead of the curve or dragged kicking and screaming.

Crypto is just a different form of money as well as different forms of recording data, creating contracts etc. There is no "whole point" anymore than there is a "whole point" to the internet or social media.

by Juha Saarinen | 8th Feb 25, 6:41pm 1738993272

I take it you regularly transact on a day to day basis with crypto currency? Like the big stuff, buying a house?

by 21Trillion | 8th Feb 25, 7:06pm 1738994807

It's getting there, still the geeks and nerds are using it over banking services. I myself have stopped using credit cards and bank issued loans and instead are using crypto loans, borrowing against my assets. The interest rate is better, it is instant, there is no set repayment terms. It out-performs the banking model on every aspect. The interest I pay goes directly to the depositor so it's a win-win on both ends of the equation.

I can open my laptop and have loaned USD in my hand in under a minute, no credit checks or personal information required. I can then get it credited to a crypto Visa card I have and be spending in under another minute. If I do need it in NZD, I can sell it for NZD through a broker and have the funds in my NZ bank within a few hours. All of this, in personal experiences, is still quicker than applying for a personal loan via BNZ.

The hurdle is getting this easily usable and understood by more non-technical users.

BNZ have lost my credit card usage and any ability of me borrowing from them, term deposits and savings.

by Juha Saarinen | 8th Feb 25, 7:36pm 1738996561

I would seriously be interested in a story on that.

by 21Trillion | 9th Feb 25, 9:12pm 1739088720

I'd love to do one here on interest but the team haven't responded to any of my attempts of communication, David has shown bias around cryptocurrency too.

by Juha Saarinen | 9th Feb 25, 9:17pm 1739089077

Firstname.surname at interest.co.nz. Assuming what you say is genuine and you're willing to back it up with examples and using your name.

by J.C. | 9th Feb 25, 9:34pm 1739090099

Firstname.surname at interest.co.nz. Assuming what you say is genuine and you're willing to back it up with examples and using your name.

As an aside, I thought Ben Jarvie's article on BTC and Maori sovereignty was thought provoking. Bit dated but Ben was an open-minded thinker compared to most who write about money within the Aotearoa context.

Quote: While I do agree that the partnership has not been upheld and that we should incorporate more consultation into the partnership’sdecision making and Māori language to explain it, I don’t believe central banking, a colonial and Marxist tool that increases inequality, is worthy of being referred to god-like deities within the Māori lexicon.

https://bitcoinmagazine.com/culture/new-zealands-past-putea-and-future-…

by J.C. | 9th Feb 25, 3:42pm 1739068960

Two days ago, Japan's Financial Services Agency requested Apple and Google to remove the apps of five unregistered overseas cryptocurrency exchanges, including Bybit. Apple has complied with this request, and as a result, Bybit's app, along with those of other exchanges like Bitget, MEXC, KuCoin, and LBank, have been removed from the Japanese App Store.

Why is this?

Because Japan has its sh*t together:

1. The FSA enforces compliance with Japan's strict regulations on cryptocurrency exchanges. No Mickey Mouse stuff.

2. In November 2024, the FSA issued warnings to these exchanges for operating without proper registration in Japan. Despite these warnings, the exchanges continued their operations, leading the FSA to act.

by Hans Brink | 8th Feb 25, 10:00pm 1739005254

It is quite simple really, if you make a profit you pay tax. Otherwise how the heck does a nation function?

by redcows1 | 9th Feb 25, 10:21am 1739049661

Lol. Explains exactly the disfunction within NZ economic system.

by Zwifter | 9th Feb 25, 10:47am 1739051228

Not really, the categories that need to pay tax are already paying tax. As long as the categories are clear then its all good. You should not need to pay tax on everything you make a profit on.

by Hans Brink | 9th Feb 25, 12:35pm 1739057711

Oh, that's right, like selling houses.

by mark_a | 9th Feb 25, 12:45pm 1739058358

The argument goes that property investors earn rent which is taxable (less any deductions of course) Any capital appreciation is a by product.

Crypto does not derive an income so why would people ‘invest’ in it? I think I know……..

by J.C. | 9th Feb 25, 6:03pm 1739077403

Crypto does not derive an income so why would people ‘invest’ in it?

If the argument is that assets that make income should be taxed but crypto doesn't earn income, then it follows that crypto should not be taxed.

Some digital assets like NFTs are compared to baseball cards. The idea that baseball cards should be taxed is kind of ludicrous.

by Millennial_Woman | 9th Feb 25, 12:06am 1739012789

Bayly also thinks he can regulate companies to pay unsecured creditors before secured ones. He has absolutely no idea. I've met him before, comes across as an arrogant air head.

by beau | 9th Feb 25, 9:01am 1739044901

All eyes on crypto utility in the US. Encourage you to investigate.

by streetwise | 9th Feb 25, 3:31pm 1739068265

What a great idea!

I think the Commerce Commission would back this: it would provide the Gambling Industry Sector with more competition to the likes of the T.A.B., casinos, the pokies, share market short selling, lotteries, and the many other enterprises where outcomes of chance predominate over outcomes of work.

by fra99le | 10th Feb 25, 10:48am 1739137681

How do you protect yourself from the whims of the tech oligarchy, if you go deep on crypto? Serious question. (cross-reference: https://www.interest.co.nz/public-policy/131840/efficiency-%E2%88%92-or…)