How ACT will unlock the digital economy

ACT Deputy Leader Nicole McKee announced further commitments to ACT’s digital economy policy at a Wellington event hosted by Bitcoin event organisers, Bitkiwi.

“ACT will prioritise better coordination and ministerial responsibility for the work programmes underway across five agencies related to the digital economy,” says ACT Deputy Leader Nicole McKee.

“This work must be supercharged to stop New Zealand falling further behind the rest of the developed world.

“ACT’s commitment comes off the back of ACT’s launch in August of Unlocking New Zealand’s Digital Economy – the only suite of policies from any political party that recognises the increasingly important role of cryptocurrencies, tokenised assets, and the wider fintech sector.

“New Zealand has a growing problem in the digital economy.

“There is plenty going on, but not enough attention is being given to bringing it all together.

“Across Government work is already underway:

1. The Ministry for Business, Innovation and Employment (MBIE) is working on capital-markets reform and how regulation can better support digital innovation.

2. The Reserve Bank is working on modernising money and payments.

3. The Financial Markets Authority (FMA) is examining tokenisation, digital assets, stablecoins and fintech.

4. The Department of Internal Affairs (DIA) is regulating virtual asset service providers and anti-money-laundering requirements.

5. The Treasury’s role is to provide overall economic and financial-policy coherence.

“In all the busyness you can immediately see the weakness that’s holding New Zealand back – these workstreams are fragmented, without effective prioritisation at ministerial level.

“The Ministers of Finance, Commerce and Consumer Affairs, and Associate Justice all have shared responsibility for this work at present.

“New Zealand does not lack intelligent people thinking about the digital economy, but this work needs to be pulled together into a more coherent plan that turns good ideas into real-world outcomes.

“The consequences of New Zealand’s to-date siloed approach are becoming increasingly obvious.

“While New Zealand studies the opportunities through multiple lenses, other countries are getting on with them, with informed estimates putting Australia at least two years ahead of us.

“Australia has already run Project Acacia, bringing together its central bank, financial regulators, Treasury and industry to test tokenised financial assets and new forms of digital money.

“It is on the cusp of moving beyond experimentation and onto practical implementation, including tokenised commercial-bank deposits, tokenised Government bonds and new regulatory pathways for digital financial infrastructure,” says Mrs McKee.

“It’s now clear that the question in Australia is not whether tokenisation has a future but how to make it happen, with the Australian Treasury conducting market analysis on a potential tokenised Australian Government bond.

“Meanwhile, the list of developed countries that have issued public or private tokenised treasuries or are investigating issuing them is longer than those that aren’t.

“New Zealand must get its house in order so we can join them.

“We should push to deliver a tangible example of digital issuance supported by our central regulators in the near future.

“ACT reminds voters that we are the only party offering tax relief to the 355,000 New Zealanders with personal exposure to cryptocurrency.

“ACT will also use its digital-economy agenda to reframe its existing cryptocurrency tax policy around the simple principle that ordinary people should not be punished for participating in the economy of the future.

“ACT will reduce unnecessary tax complexity and deliver tax relief through changes to the retail bright-line for holding cryptocurrency and de minimis settings for using it in the everyday economy.

“Where other parties see cryptocurrency and the digital economy as an opportunity to over-regulate, restrict and tax, ACT sees an opportunity for New Zealand to innovate, compete and prosper.”