New Zealand has become a key player in cryptocurrencies, with the tech-savvy population and progressive regulations helping the sector flourish.
However, they still have some way to go before they can match crypto powerhouses elsewhere in the world, and can garner knowledge from developments in other jurisdictions.
A Growing Crypto Market in New Zealand
The cryptocurrency market in New Zealand reportedly generated approximately $134.7 million in revenue last year.
The number of users has been tipped to rise to around 1.94 million by 2025 – a penetration rate of 36.68%. These numbers show that a rising percentage of Kiwis are integrating digital currencies into their financial portfolios.
According to the Henley Crypto Adoption Index 2024, New Zealand is 14th for adoption globally, showing that the Oceania nation is becoming a force in the crypto ecosystem.
Even with a small population just north of 5.2m, New Zealand has adopted cryptocurrencies at a more impressive rate than countries such as Canada and the United Kingdom, where regulatory barriers and lack of public awareness have limited growth.
How New Zealand Compares to the United States
The United States is considered a giant in crypto adoption with a large, consumer-centric market, robust financial infrastructure and renowned tech hubs.
The US sits in the top three in the Henley Crypto Adoption Index, alongside Singapore and Hong Kong. Even though New Zealand has adopted crypto on a smaller scale, they still have a few advantages.
Firstly, it is easier to make regulatory changes in a smaller community without much fuss. In the US, every state runs on different laws around cryptocurrencies, which makes the situation confusing, but NZ enjoys a more cohesive national policy promoting innovation while protecting consumers.
While the US market unsurprisingly dwarfs New Zealand’s numbers, the penetration of crypto in NZ per capita is impressive.
It also helps that the Kiwis have a tech-friendly environment and a proactive government, allowing them to compete with global leaders in crypto.
Key Drivers of Crypto Adoption in New Zealand
One of the primary reasons why Kiwis have quickly adopted crypto is because of the forward-thinking policies implemented by the government. These have helped ensure trust and transparency in the crypto sector.
The New Zealand government adopted the OECD’s Crypto-Asset Reporting Framework last August. This protocol requires crypto service providers to disclose their transactions to tax authorities. The move will raise the bar for NZ while boosting investor confidence in New Zealand.
The tech-savvy population of New Zealand is another massive bonus. New Zealand has one of the highest rates of internet penetration in the world, and they are more likely to embrace crypto.
With inflation sweeping the nation, New Zealanders are using cryptocurrencies to hedge against volatility. It is also an excellent means of diversifying portfolios.
The younger generation, in particular, understands digital assets better than traditional assets such as real estate and shares.
There are also active communities of crypto enthusiasts and several educational initiatives that have aided adoption including hackathons, workshops and grassroots programmes.
New Zealand has a thriving start-up scene with blockchain-focused firms curating solutions for industries such as finance and supply chain management. This tech ecosystem attracts talents and big investments into the crypto sector.
Online Casinos Drive Crypto Adoption & Learning from the US
New Zealand recently announced a regulated online gambling market – a win-win move for the gaming and crypto industries.
They also announced that they plan to auction 15 casino licences for operators to funnel players towards legal platforms. Some of these companies seeking licences accept crypto payments, boosting blockchain adoption.
The most popular online casinos in New Zealand will be the ones which embed blockchain technology in their operations, a development expected to accelerate crypto adoption in the country.
When it comes to establishing a fully functioning online casino market, New Zealand can learn some lessons from relative newcomers like the US.
States such as New Jersey have shown that there are immense economic benefits to allowing an online casino market to thrive. A massive chunk of the taxation revenue goes to public services.
New Zealand needs to adopt similar transparency in tax reporting and how it reinvests the revenue. Some of that money can go into reinforcing the budding crypto industry, ensuring a cycle of success.