Industry leaders urge blockchain policy to protect NZ GDP future

Industry leaders have warned that the absence of a clear government policy around emerging digital technologies may result in New Zealand losing billions in potential GDP to overseas markets.

Sector experts have stated that the development of a regulatory framework for digital technologies, notably blockchain, could resolve significant barriers faced by New Zealand's primary sector producers, as well as the financial industry.

Blockchain is described as a secure digital record system which, rather than centralising information with a single entity, stores identical data across thousands of computers worldwide, reducing the risk of tampering. This technology can be applied to track goods through supply chains, thus improving the traceability of exports such as meat, dairy, wine, kiwifruit and Manuka honey.

In financial services, blockchain offers the potential to reduce transaction costs and speed up payments for businesses and consumers. Additional applications identified include the underpinning of digital identity systems, health record management, support for carbon credit trading and the implementation of smart contracts that execute automatically when agreed conditions are realised.

Export opportunities

Industry bodies believe that blockchain technology could develop into one of New Zealand's largest export sectors within five years, provided regulatory uncertainty is addressed.

Trevor Topfer, Executive Director of Blockchain NZ-an organisation representing banking, technology, professional services, and academic stakeholders-said inaction is already having an impact and described New Zealand as being at risk of becoming a net importer of technology.

"Hong Kong announced its stablecoin framework and pulled in $11.7 billion of investment in a month. Singapore did almost $11 billion last year and Australia expects 200,000 high-paid blockchain jobs by 2030. If New Zealand doesn't move, we'll end up importing this technology instead of exporting it. The internet is being rebuilt using blockchain, and either we take part or we get left behind," he says.

Topfer highlights the broad transformative potential of blockchain, from verifying agricultural and horticultural exports to automating logistics, digital identity verification, and property transactions.

"Imagine being able to trace a Gisborne sheep's wool from the farm gate through to a premium fashion label in Paris and have that verified instantly. That's just one of the potential applications blockchain offers New Zealand's primary producers," he says.

Topfer also points to uncertainty faced by local blockchain firms due to the lack of clarity regarding the technology's status within existing financial regulations.

"Offshore, regulators are giving startups and investors the clarity they need to operate and attract capital. Here, the framework is ambiguous and that means we're losing businesses, talent and tax revenue overseas. As an example, most of New Zealand's $9 billion in annual digital assets trading happens on offshore platforms. That represents significant amounts of money and associated compliance going elsewhere," he says.

Calls for collaboration

Paul Quickenden, General Manager at Easy Crypto New Zealand and a Blockchain NZ member, stated that collaborative action between industry and government could expand the potential of the digital asset sector.

"New Zealand has a real opportunity to set a global benchmark for how emerging technologies are safely and responsibly integrated into the financial system. By working together, we can establish a clear taxonomy that defines how different types of digital assets such as stablecoins, NFTs and tokenised property are classified and regulated. We can also provide clarity for licensed advisers to confidently guide clients, and future-proof our legislation to support innovation around tokenisation of real-world assets like property and commodities," he says.

Quickenden added that a New Zealand currency-backed stablecoin could support monetary sovereignty, enhance payment efficiency for exporters and reduce dependence on foreign platforms.

Regulatory coordination

Topfer indicated that a lack of clear governmental ownership is delaying progress in adopting digital technologies. He suggested the newly established Parliamentary Digital Assets Working Group could coordinate efforts between agencies such as the Ministry of Business, Innovation and Employment, Treasury, Reserve Bank and Financial Markets Authority, which currently share responsibilities.

"At the moment, responsibility is fragmented across Commerce, Treasury and Agriculture with no single authority capable of overseeing digital assets holistically. We need a coordinator who sits across all these departments and looks at it through a digital asset lens. Without that, we're just spinning our wheels."

Topfer considers that New Zealand's established tech sector and governance framework provide a strong foundation for global leadership in this field, but emphasised the need for prompt action.

"We already have a thriving tech sector and world-class developers, but we need to send a clear message that we're open for business - if you want your blockchain product to carry a reputation for trust and transparency, you come to New Zealand."

The first meeting of the working group will address strategies for cross-party collaboration on these issues, with the objective of establishing policies that will persist through future changes in government.