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The cryptocurrency ecosystem is evolving towards a cleaner, greener future.
Most of the energy used to mine crypto already comes from renewable sources. Rather than harming the planet, crypto and blockchain can actually be a force for the good of the environment.
The debate around bitcoin and its carbon footprint has focused on the energy they consume, said BlockchainNZ Chairman Bryan Ventura.
Cryptocurrency is a form of payment that can be exchanged online for goods and services. Many companies have issued their own currencies, often called tokens, and these can be exchanged for goods or services provided by the company.
Companies are also creating new financial products and services using blockchain technology or decentralized finance. New forms of virtual assets are also being created, using non-fungible tokens. Cryptocurrencies, decentralized finance, and virtual assets all work using a technology called blockchain.
“Cryptocurrency adoption has skyrocketed during the covid pandemic, as private investors, state-owned companies and under-banked individuals realized the benefits of digital currencies.
“Regulators have struggled to keep up with this growth and may limit financial inclusion by applying rules to crypto markets that are inappropriate for their purpose.
“Looking to past eras of innovation, regulators can work collaboratively to adapt rules and policies to support open competition and rapid innovation in the cryptocurrency industry.
“But bitcoin consumes resources. As with any other energy-consuming industry, it is up to the crypto community to recognize and respond to these environmental concerns.
“Governments around the world are looking to increase the regulation of cryptocurrencies and virtual assets, which can extend to decentralized finance, non-fungible tokens and potentially other concepts using blockchain technology. There is a risk that Aotearoa New Zealand will follow suit.
“In doing so, it may unintentionally hamper our virtual asset industry. Regulation and compliance are also relevant for New Zealand virtual asset businesses’ access to bank accounts. “
BlockchainNZ, which is part of the NZTech Alliance, can help government understand the basics, starting with how bitcoin / blockchain works all the way to smart contracts, security tokens and decentralized autonomous organizations.
Parliament’s select finance and spending committee is reviewing more than 260 submissions in an investigation into the nature, impact and risk of cryptocurrencies. Bids closed earlier this month.
Cryptocurrencies are an emerging source of innovation that promises to democratize financial markets. Some cryptocurrencies have the potential to provide a better store of wealth than official currencies.
The Reserve Bank claims in its submission that products such as bitcoin claimed to be an alternative form of currency but were little used as a means of payment.
However, BlockchainNZ told the select committee that the combined value of cryptocurrencies stood at nearly $ 3 trillion in August and that most activity involving cryptocurrencies in New Zealand is governed by existing laws. .
Dozens of people and companies involved in the cryptocurrency industry have made proposals in favor of cryptocurrencies.
BlockchainNZ’s submission encourages the government to work with local New Zealand industry to set standards for virtual asset service providers (VASP), companies that manage cryptocurrencies for people, covering training on the risks and how cryptocurrencies should be managed by these trusted third parties.
“It is important to balance mitigating the risks associated with cryptocurrencies and VASPs, with the importance of preserving a legal and regulatory environment that does not unduly stifle New Zealand innovation and prevent voluntarily compliant businesses to operate.
“Achieving this balance would have positive effects on the wider economy, such as growing New Zealand’s tax base and jobs, protecting consumers and reducing the risk of money laundering overall. and terrorist financing. “
© Scoop Media
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