QUEENSTOWN - New Zealand’s digital asset sector spent day one of CryptoWinter26 debating with the banks, hearing Blockchain APAC chief executive Steve Vallas say New Zealand is not in the global conversation, and listening to liquidators explain what they found when they took over Cryptopia and Dasset.
The rest of the day ran through the Crypto-Asset Reporting Framework that came into force on 1 April, New Zealand’s first authenticated agentic card transaction, and where stablecoins sit once software can spend.
Around 40 speakers are on the programme across two days at QT Queenstown.
MBIE, the Financial Markets Authority and the Department of Internal Affairs were all represented.
New Zealand banks debate crypto
Mark Paice of Kiwibank, Graham Pohl of The Co-operative Bank and Sean Preston of Cuscal Paymark sat next to Paul Quickenden of Swyftx, Jerome Faury of Immersve and Craig Duffield of Pay It Now.
Banks on one side and crypto on the other, in a friendly debate over which side keeps the customer.
KPMG’s Ceri Horwill moderated.
She told the room the positions were assigned by her, not given by their employers.
“The views today are not necessarily the views of your institution that you’re representing here today,” she said. “You’ve been asked to take a position by me.”
Amy-Rose Goodey of the Digital Economy Council of Australia, Mastercard’s Ashima Chaudhary and Blockchain Forum NZ strategic advisor Kate Teppett sat as judges.
Horwill put one question to both sides.
“As tokenisation shapes part of finance, which roles stay with the banks, which will move to new providers, and where will the two converge?”
A live poll to the audience opened the session; How did the room expect the relationship between banks and digital asset providers to develop over the next decade?
Sixty-one per cent said the two would keep separate roles but become increasingly integrated.
Nineteen per cent said digital asset providers would take a larger role from banks.
Twelve per cent said they would remain primarily competitors.
Sean Preston of Cuscal Paymark opened for the banks.
“When something goes wrong, most people want more than a transaction hash and a sympathetic Discord moderator,” he said.
“The rails will change, and they should. Digital assets will add new capabilities and healthy competition. But trusted money, credit, protection and accountable institutions remain essential.”
“Blockchain will provide a new engine. Banking provides the steering, the seatbelt, and a warrant of fitness.”
Craig Duffield of Pay It Now opened for the other side.
“Customers do not wake up wondering which ledger won overnight,” he said.
“They care whether value moves safely and reliably, preferably before their coffee gets cold.”
“It does not mean removing banks. It means preserving the functions that perform best, while opening other parts of finance to competition and new ideas.”
Graham Pohl of The Co-operative Bank:
“I congratulate my opposition for cornering a particular segment of the market, the tin hat brigade,” he said. “They distrust government regulators, they distrust banks, and they take comfort from the fact that COVID was not caused by Bitcoin or Ethereum because it was caused by 5G.”
“Not all of New Zealand’s 27 banks are fearsome T-Rexes,” he said. Some specialise in agribusiness or construction finance, or are customer-owned and return the profits. “There are times when we’ll be competitors, but hopefully many more times when we can be collaborators.”
Quickenden came in off Pohl:
“I’d like to thank our banking colleagues for leaving the mahogany boardroom and not getting their super normal profits to come down to our little conference,” he said.
“Really good idea to have the tin hat. Was pretty helpful this morning in the rain as well.”
Then he put a number on the settlement.
“What if we could instantly introduce and inject three and a half to five billion dollars into the New Zealand economy? That is 1.5 per cent of GDP.”
The money, he said, is sitting on bank balance sheets waiting to settle.
Up to $100 million a year in interest. “It’s not sitting in the customers’ accounts. It’s not sitting in the businesses’ accounts. So it’s not productive.”
“How we move money needs to move at the speed of the economy, not the speed of the banks.”
“It must be nice turning up at 9.30 and leaving at 4.30.”
Pointing at the current rails and calling them good enough, he said, “is a bit like saying the horse and cart is okay, we don’t need cars.”
“Do we move our money in the 21st century? Do we keep hanging on to 15th century technology?”
Goodey, judging, picked up the hat.
“I am also a team foil hat wearer,” she said. “It helps with my 5G reception and also with the rain.”
Immersve chief executive Jerome Faury was not interested in meeting in the middle.
“There’s zero chance that the future of payments is fiat,” he said.
“I’m also not into this kumbaya. They sit on the fence, you get a sword.”
He ran through New Zealand’s payments history - EFTPOS in 1987, the first e-commerce transaction a decade later, the free float of the New Zealand dollar - and then stopped.
“We once were all black on payments. Now we’re not even the all whites.”
“What have we done in the last 20 years?"
“The banks over here make an ROE of around 13.4 per cent. They’re the most profitable banks in the world. They have no carrot, they have no stick to innovate in payments.”
He put ten years of open banking at 0.2 per cent of transactions and about 200,000 users.
Immersve, he said, had launched stablecoin payments into 140 countries in the past twelve months.
Agents, he said, might never open a bank account. They can open a wallet.
Kiwibank general manager specialist markets Mark Paice:
“This is going to be a weird side of the debate, because I must agree on what the benefits of blockchain tokenization actually do deliver.”
Asked from the floor where a tokenised deposit would sit on a bank’s balance sheet, he said the question was still open inside the bank.
“Unresolved, to be fair, but it is something that our conversations are currently in.”
Pohl came back at the mahogany line.
“There are 27 banks in New Zealand and we are not all making billion-dollar profits,” he said.
“And we don’t all have mahogany boardrooms.”
The judging bench broke on whether banks and crypto should meet in the middle.
Teppett said New Zealand’s digital asset conversation is payments first, and stablecoins dominate it, which was not the conversations she had sat in in London.
“I probably am a proponent of kumbaya to a certain degree,” she said, “just because of the organisations I’ve worked with, the start-ups I’ve worked with in the digital assets space to try and come up with solutions.”
Chaudhary backed collaboration. Innovation, she said, happens when incumbents partner with the firms building the new rails.
Goodey did not.
“Also not a fan of the kumbaya,” she said. The digital asset industry has been going about 15 years. The banks have been going forever. “We’re now at the table.”
“It might just be that the innovation just surpasses the banks’ capability, and the banks will just have to move.”
The same poll closed the session. Integration had fallen to 48 per cent. Digital asset providers taking a larger role from banks had risen to 34.
No bank account, no business
Companies looking at New Zealand were not waiting on an Act.
They were waiting on a bank.
MinterEllisonRuddWatts partner and Blockchain Forum NZ chair Jeremy Muir was asked what frustrates companies looking at New Zealand.
“It’s not really the speed of regulation,” he said.
“There are things that are actually practical concerns that are not even regulatory, or are only regulatory in part, such as getting a bank account, which is a whole other topic.”
A question from the same session put it to the regulators. Many people in the room, the speaker said, cannot get a bank account, “which is all blamed on the AML rules.” A financial business can offer a savings account. A digital asset business cannot - “all under the excuse of AML rules.”
Rocky Yuen, principal advisor in the Department of Internal Affairs’ AML/CFT group, did not dispute that the accounts were hard to get.
De-banking and de-risking, he said, are not only a virtual asset issue.
“Traditional financial institutions are not able to get bank accounts in certain segments or certain sectors,” he said. “So again it’s not just a virtual asset sector concern. It is more of a risk appetite concern.”
They are a jurisdictional issue as well, he said.
Correspondent banks are not providing services to some countries.
“Virtual assets has got a higher inherent risk that is in the national risk assessment recognized,” he said. “It’s also internationally recognized.”
What DIA could do, Yuen said, was give banks and firms clarity on the risk and on how it can be mitigated.
He accepted AML/CFT as one of the reasons named from the floor. He did not accept it as the only one.
The banks on the afternoon stage did not answer how a digital asset firm gets an account.
They answered what they still think a bank is for.
Pohl said New Zealand’s 27 banks are not all the same animal.
“There are times when we’ll be competitors, but hopefully many more times when we can be collaborators.”
Paice, asked where a tokenised deposit would sit on a Kiwibank balance sheet, said the bank had not settled it.
“Unresolved, to be fair, but it is something that our conversations are currently in.”
Cryptopia & Dasset: the clean-up crew
Lane Neave partner James Cochrane introduced Grant Thornton’s Tom Aspin as the man the country’s digital-asset liquidators call when the file will not sit still.
“You can think of us as the clean-up crew,” Cochrane said.
They took the room through the two collapses New Zealand has not finished paying for.
Cryptopia had 2.2 million registered users across 183 countries and 851 different currencies, “everything from Bitcoin to Miley Cyrus coin.”
At its peak it was in the top 30 websites by traffic, had approached Arsenal about a shirt sponsorship, and had discussed renaming Christchurch International Airport after itself.
Its custody arrangements were, in Aspin’s word, a bird’s nest.
“Some of the assets were stored on a hardware wallet on a lanyard around the director’s neck, including customer funds. Some at home for safekeeping. And then some in a leased bank vault.”
A quarter of the private keys sat in a server farm in the United States, which Aspin said issued “what I describe as a ransom payment for the full value of the lease” once it learned of the liquidation.
Recovering them meant flying someone over to collect the hard drives by hand.
Armourguard would not insure the transport.
The value could move too much between takeoff and landing.
“So unfortunately the transfer fell to me,” Aspin said.
“I still quite clearly remember going through airport security, looking at a couple of hard drives and a couple of hardware wallets going through the X-ray machine, and thinking about what would I have done and how would I explain that to my bosses.”
Bitcoin was about US$8,000 when Cryptopia went into liquidation in 2019. The coins went back to customers in December 2024. Aspin said $4,000 of Dogecoin at the date of collapse was worth a million dollars by the time it was returned.
“We don’t usually get love letters,” he said.
One claimant asked them to hold the assets another five years. “I would have sold by now.”
Dasset lost its banking provider at the start of 2023, and with it the thing that had set it apart: New Zealanders could fund an account by bank deposit. Cochrane said founder Stephen Maskill was on BlockchainNZ’s council at the time he went missing.
“In August 2023 we were appointed as liquidators, and for two days the CEO and founder spoke to us, and we haven’t seen them since,” Aspin said.
About US$5 million in withdrawals did not reconcile to anything on the database. A number of customer balances showed nil. There were 7,000 New Zealand customers.
“The more people we interviewed, the more it reflected that governance just didn’t exist.”
The product was sold as decentralised. The keys were not.
New Zealand isn’t in the conversation
Blockchain APAC chief executive Steve Vallas spent four days in New Zealand two months ago.
Thirty-nine meetings, five political parties, seven regulatory bodies, three banks.
“The New Zealand position is you are moving faster than you were, but in a relative sense you’re moving slower,” he said.
“It’s because the rest of the world is moving faster.”
“You need more stories to tell. You need more people who carry the New Zealand story into other markets. You talk too much to yourselves. No one knows we’re on the other side of the world.”
“Don’t confuse a better dressed room for a better equipped room.”
Blockchain Forum NZ executive director Trevor Topfer, who convened the event, did not dispute it.
“Australia on the global stage is kind of recognized as a jurisdiction, which means New Zealand’s not even in the conversation,” he said.
“And I’m pretty loud. I get into the rooms and I try and be loud. But New Zealand is not even in the conversation.”
CryptoWinter26 continues at QT Queenstown on Thursday, with a keynote from Associate Justice Minister Nicole McKee and an industry announcement the organizers have not described.