BitPrime Embraces Parliament's Inquiry Into Cryptocurrency

BitPrime today announced its support to Parliament's Finance and Expenditure Committee inquiry into the current and future nature, impact and risks of cryptocurrencies in order to stimulate New Zealand into becoming a Cryptocurrency and Distributed Ledger Technology (DLT) global leader.

BitPrime has been a leader in the New Zealand cryptocurrency industry since 2017 and is one of its most prominent players. Its trade volumes are expected to exceed 80 million New Zealand Dollars in 2021, a growth of at least 30% per cent over the previous year. Seeing that cryptocurrencies are heavily regulated under the current legislation, such growth is only possible due to BitPrime's deep experience and diligence around Compliance, Anti-Money Laundering regulations and Blockchain Analytics - knowledge and experience that the company is eager to share.

"Current regulations around AML and taxation are very effective, the industry is very much engaged with the Department of Internal Affairs and Inland Revenue, and BitPrime has worked very closely with both departments since early 2017. The third pillar that is missing here is the lack of specific regulation around cryptocurrency in financial markets. If we can address how the market is overseen, we can potentially make New Zealand the jurisdiction of choice for the most innovative companies in the cryptocurrency and DLT spaces", said Ross Carter-Brown, BitPrime CEO.

A recent survey by the Financial Services Council demonstrated that 21% of New Zealanders have already invested in cryptocurrency or are looking into doing so. While cryptocurrency is going mainstream, it is still in its early days of adoption, and there is a tremendous amount of room for technological advancement and uptake. Countries such as El Salvador are now recognising Bitcoin as legal tender; global online payment services, such as PayPal, allow its users to buy and withdraw cryptocurrency; and China recently created its own digital currency. These are definite signs that cryptocurrency is ready to lose the stigma that prevents the general public from recognising crypto as an integral part of the financial system in the modern world.

"There is a lot of volatility that puts investors off, but cryptocurrency continues to move forward at the speed of light. It will become clear to Parliament and everyone else that cryptocurrency is a great way to fight crimes and assist with AML and CFT. The industry is doing a lot to protect the public from bad actors, scammers and fraudsters. But we should not forget that overregulation leads to people finding ways around mainstream sources. There should be a balance between the AML regulation, identifying bad actors and the burden that is put on customers who are not involved with suspicious activities", said Anna Rybakova, Compliance Manager at BitPrime.

Carter-Brown adds that the technology behind cryptocurrency and other digital assets is very different from the traditional financial markets systems. "We have to be careful that we are not trying to apply traditional regulations to a new technology that may not be compatible in the same way. We have to be careful that we make sure that the regulations are practical because we don't want to get into a situation where we have a two-tiered system. Meaning, having a group of people engage with the regulated providers, and the other group of the public who do not, creating a much bigger black market. That's a situation we definitely want to avoid."

In order to explain where the cryptocurrency market is currently at and where it's headed, parallels have been drawn by comparing the crypto industry and the early days of the Internet. Such comparison is possible by analysing indicators such as active wallet addresses growth and cryptocurrencies trading volumes against the number of Internet users over the decades. The results of such studies demonstrate that in terms of blockchain technological evolution and userbase, it is as if we were still back in 1997. This means that the industry is still in its infancy and, by knowing that, companies, regulators and the general public can better prepare for the promising road ahead.

"I believe the cryptocurrency space and traditional financial markets are moving closer together. There is a lot more overlap, and in the future, maybe in 10 years, we will have a mix of cryptocurrencies and central bank currencies all using the same or similar technology. And there will be a lot more interoperability as well. You will be able to swap assets very quickly without the issues we face today. I think the future is bright, but if we want to make sure that New Zealand is a global leader, we need robust but practical legislation to support the growth of the cryptocurrency industry and to support the New Zealand fintech sector," finalised Carter-Brown.

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