The income recognized depends on the price change of the crypto used for the purchase since you received it. However, it must be noted the average IRD agent is not a crypto tax expert, and it’s fact there are bigger fish to fry than the average crypto retail investor. We’d recommend staying on top of it in the meanwhile, as if you’ve purchased through a KYC’d exchange, you are certainly on the IRD’s list. Easy Crypto is New Zealand’s largest and most popular cryptocurrency retailer, making it ‘safe, smart, and easy‘ for Kiwis to buy and sell over 160+ cryptos including Bitcoin in NZ. Easy Crypto is also launching a digital wallet for customers to streamline safe storage of their assets online.
The IRD’s definition emphasizes that the tax treatment of crypto assets is based on their characteristics and usage, rather than their specific blockchain or nomenclature. This means that regardless of the type of crypto or the blockchain it operates on, the tax obligations will be determined by how the crypto asset is utilized by the individual or entity. Like almost everything – if you’ve made gains on your cryptocurrency, the NZ government and IRD will expect their slice.
“We think there’s a bit of a lack of innovation in the New Zealand payment system, and we think digital cash can act as a real spur to drive competition in.” Woolford said the RBNZ was working in the background in assessing the implications of a digital currency on monetary policy and setting interest rates as well as broader financial stability. The discussion paper said care would have to be taken with the design and management of digital cash to ensure its security, public use and confidence. The Reserve Bank (RBNZ) has opened a round of public consultation on the move towards a digital dollar, which would circulate alongside physical notes and coins. He said a digital currency would have to be designed to ensure it was secure, and fitted the needs of monetary policy such as setting interest rates.
If investors lose access to their app by losing their phone or forgetting their password, the wallet app allows them to use friends’ or family’s devices as a back-up means to access their holdings. The submissions also highlighted the need for clear, accurate and accessible information on cryptocurrencies. Some respondents expressed concern about the general lack of knowledge about cryptocurrencies and how they work. When asked how the RBNZ would ensure our digital currency was secure, after it suffered a cyber attack in 2020 and data breach in 2021, Woolford said it was yet to determine how that would be ensured, but promised it would be. “It is important to be able to maintain monetary sovereignty,” the Reserve Bank of New Zealand’s (RBNZ) head of money and cash Ian Woolford told Markets with Madison.
Any profits or losses from selling or purchasing cryptocurrencies in New Zealand are subject to taxes. The tax treatment of holding cryptocurrencies as an investment relies on your trading intentions and frequency. She was seeing a growing number of businesses and institutional customers turn to cryptocurrency to manage their payments and billing.
Madison Reidy is the host of New Zealand’s only financial markets show Markets with Madison. She joined the Herald in 2022 after working in investment, and has covered business and economics for television and radio broadcasters. Easy Crypto would not earn any money off holdings in investors’ wallets, but the plan was to take it global. Investor holdings of NZDD would be held one-for-one with New Zealand dollars in an Easy Crypto-controlled trust account. Easy Crypto would earn the interest on funds held in the account, like a deposit savings account.
It is essential that financial intermediaries dealing in cryptoassets develop a corporate culture of “performance with integrity”, one in which each member of the organisation is centred on the best interest of the client. If the RBNZ did not adopt a CBDC, Woolford warned it could lead to a future where central banks disappeared and our currency was made up of numerous stablecoins of varying issuers and valuations. The RBNZ believed central bank-issued currency played an important role in the economy, he said, including because it gave it the power to implement monetary policy such as rate hikes and cuts. “At the moment the cash system is under serious pressure, so that form of central bank money is getting less and less. He said everyone would benefit from having a digital currency available, as it would spur innovation and competition.
