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NZ Bankers’ Association boss: Bitcoin could be problem for governments

NBR staff
Sun, 05 May 2013

The CEO of the New Zealand Bankers’ Association Kirk Hope told TVNZ’s Q+A programme that a decentralised digital currency like Bitcoin could present problems for governments.

Bitcoins can be used to buy and sell items anonymously online.

“That’s one of the challenges, I think, for governments. We’ve got some anti- money laundering legislation coming in to force here on the 30th of June. Bitcoins are untraceable, virtually, and they are being used to buy things like arms and drugs, so those types of activities can lead themselves to the types of things that governments are trying to prevent.”

The digital currency also means governments and banks are cut out of financial transactions, which is of concern to bankers.

“Well, I think one of the interesting things about Bitcoin is that it is a cheap way to transfer funds internationally, and that’s one of the things that have been picked up.”

Kirk Hope isn’t ruling out banks becoming involved if digital currencies like Bitcoin were to take off.

“Only to the extent that electronic currency overtook, you know, normal currency, and actually the issuance of normal currency has been rising, so they’re making more money off the seinorage, the issue. What I’d say probably is that if it’s not Bitcoin it might be some other type of digital currency that could come into play because Bitcoin’s capped out at 21 million Bitcoins, if you like," he said.

"That’s the maximum amount that can ever be on issue, we understand. But that doesn’t mean that some other player couldn’t come into the market, and, you know, that might be a bank.”

NBR staff
Sun, 05 May 2013
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NZ Bankers’ Association boss: Bitcoin could be problem for governments
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