The government has opted to establish restrictions on cash transactions involving online assets
The government has dropped an initial agreement in principle to set a blanket ban on crypto ATMs, opting instead to establish limitations on cash transactions for virtual assets.
It will introduce the AML/CFT (Omnibus) Amendment Bill this month, which includes regulation making authority to effect this solution to the criminal misuse of virtual assets.
“Banning something is a serious decision that should not be taken lightly. Cabinet has now considered the evidence and agreed that a blanket ban is not the right response at this time”, said associate justice minister Nicole McKee in the government’s media release. “Crypto ATMs present real risks, particularly where criminals use cash to move funds into virtual assets quickly and anonymously. But the analysis also found they can have legitimate uses, including for cash-reliant New Zealanders who want to access or invest in virtual assets”.
She explained that Cabinet’s agreement in principle, which was made in June 2025, included the condition that it would be subject to further analysis because the government sought a less restrictive solution than a blanket ban.
“New Zealand should be a country that welcomes innovation while taking criminal misuse seriously”, McKee said. “Instead of an outright ban, Cabinet has agreed to establish regulation-making powers that would allow the government to place restrictions on cash transactions for virtual assets. These could include maximum transaction thresholds or, if clear evidence of harm emerges in New Zealand, prohibit cash payments for high-risk virtual assets”.
These powers would grant the government practical risk response tools while maintaining opportunities for legitimate business, investment and personal choice, she added.
“Cash remains attractive to organised crime because it is difficult to trace. When cash is converted into virtual assets, such as cryptocurrencies, criminals can move funds rapidly across borders in ways that are difficult for law enforcement to detect or disrupt. That is why we are not ignoring the risks. We are putting practical tools in place so the government can act quickly if the evidence justifies it, while avoiding unnecessary restrictions on lawful users”, McKee said.
The associate justice minister indicated that she had requested officials to conduct consultations with crypto providers and users regarding the development of balanced safeguards.
“These decisions form part of the government’s wider reform of New Zealand’s Anti-Money Laundering and Countering Financing of Terrorism system, aimed at making it easier to do business and harder to commit crime”, McKee said.
