For the first time in New Zealand history, the Financial Markets Authority (FMA) and Inland Revenue (IR) collaborated on a joint presentation at the recent FinTechNZ Connect events in Auckland and Wellington.
The evenings’ discussions focussed on a hot topic for the financial sector: the regulation and tax implications of Blockchain and cryptocurrencies in the New Zealand market.
Presenters Vanessa Simons from the FMA and Rachael Gemming of IR both explained their organisations’ positions clearly, providing us with more clarity around online currencies; and what we can expect to see happening in regulation moving forward. The FMA noted that while its main objective is fraud prevention through promoting fair, efficient and transparent financial markets, it also works to support innovation and promote flexibility.
Inland Revenue clarified that for tax purposes, cryptocurrencies are treated as property, similar to gold bullion, rather than falling into the same category as foreign exchange.
The main takeaways for financial institutions looking to move into this space, was to speak with both regulators early in the set-up phase, so there are no surprises later on. Despite offering words of caution, both speakers delivered a clear intention to support and grow the cryptocurrency sector.
We also heard from some amazing speakers and panellists including Mel Gollan from RIP Global, Chris Linton from Duncan Cotterill, Shane Marsh from ANZ, Shahid Saiyad from IBM, Stephen Macaskill from DASSETT, Mark Pascall from Blockchain Labs, Rachel Strevens from Ilumony, and Janine Granger from Easy Crypto, who were all able to offer a unique perspective on this topic. It was clear from the wide range of opinions and experiences shared, no one person or organisation knows the all answers in this new space. But by working together, we can create the correct environment for companies looking to adopt virtual currencies, help them flourish, and continue to be a country known for its agility and early adoption of new technology.
Blockchain is here and so are cryptocurrencies, we just need to continue the conversation started at FinTechNZ Connect, wade through the hype and figure out practical applications of this new technology for the wider New Zealand financial landscape.