New Zealand Gives Greenlight for Cryptocurrency Income and Salary Payments

[The Cryptovator]

News source: https://www.coinspeaker.com/new-zealand-cryptocurrency,

Seems New Zealand showing positive behaviour about crypto-currency. As title said they are going to legalize crypto-currency for use it officially like salary payments. Workers could receive their payments in crypto-currency but there is few conditions.

Whatever conditions but I think this is positive for worldwide crypto-currency users. Hope slowly more countries will show that kind of behaviour about crypto-currency. And we might see a new crypto-currency world.

[Kakmakr]

Read the fine print.... " Most specific of all the conditions is probably the part of the ruling that requires that “the value of the crypto-asset is pegged to one or more fiat currencies.” This suggests that only stablecoins will be usable as payment for salaries, significantly reducing the number of virtual assets that will not raise any violation issues. "

They are paving the way for their own asset backed GovCoin by doing this, because their own GovCoin will have to be pegged to their own Fiat currency.   

We will see a lot more countries that would be doing the same soon, because it reduces the need for physical cash and the need to print more Fiat currencies. <It is expensive to produce physical cash and coins.> 

By pegging it to Fiat currencies, they are able to manipulate it and that gives them control over that Crypto currency. 

[avikz]

Read the fine print.... " Most specific of all the conditions is probably the part of the ruling that requires that “the value of the crypto-asset is pegged to one or more fiat currencies.” This suggests that only stablecoins will be usable as payment for salaries, significantly reducing the number of virtual assets that will not raise any violation issues. "

That sums up only one part of the story! Only stable coins can be used to pay salaries and other benefits! However, if the market is opened for the cryptocurrencies, then all types of cryptos will be mixed within their mainstream economy! Salary payment is only a part of the ecosystem!

More important part is that, NZ is adopting cryptos in their market for good! Even though they are paving their way for government controlled digital currency (which is the imminent future), it is also great news for the crypto community in general! More and more people will be either investing in cryptos or using it for their regular purchases, that's what matters the most!

[hugeblack]

“In the current environment where crypto-assets are not readily accepted as payments for goods and services, the Commissioner’s view is that crypto-assets that cannot be converted directly into fiat currency on an exchange are not sufficiently “money-like” to be considered salary or wages.”

I think New Zealand is on the right track after reading this part of the article.
Not all cryptocurrencies are real currencies that have value and therefore the payment of wages through them may be meaningless as their value may drop to zero and therefore there is no real benefit from paying through them.
Also, the legislative framework did not neglect the tax side, but I do not know how this will be calculated, especially with the fluctuation of value, which makes individuals the weakest.

[audaciousbeing]

Read the fine print.... " Most specific of all the conditions is probably the part of the ruling that requires that “the value of the crypto-asset is pegged to one or more fiat currencies.” This suggests that only stablecoins will be usable as payment for salaries, significantly reducing the number of virtual assets that will not raise any violation issues. "

They are paving the way for their own asset backed GovCoin by doing this, because their own GovCoin will have to be pegged to their own Fiat currency.   

We will see a lot more countries that would be doing the same soon, because it reduces the need for physical cash and the need to print more Fiat currencies. <It is expensive to produce physical cash and coins.> 

By pegging it to Fiat currencies, they are able to manipulate it and that gives them control over that Crypto currency. 

You have taken time to read through... Any news coming from government or its agencies purportedly supporting crypto should not be taken literally or made to mean blanket support for bitcoin or any other anonymous coin because no government would do such. Its like giving up your absolute right of power to others. The point government would make is to give you reasons not to go out there looking for other cyptos when they have provided one for you and this would then justify their clamp down if you fail to abide with that which they have provided for you. Its that simple...

[o_e_l_e_o]

Read the fine print.... " Most specific of all the conditions is probably the part of the ruling that requires that “the value of the crypto-asset is pegged to one or more fiat currencies.” This suggests that only stablecoins will be usable as payment for salaries, significantly reducing the number of virtual assets that will not raise any violation issues. "

The article has actually made a mistake here. I'll quote part of my post from another thread about this below:

If you read the actual Tax Information Bulletin from New Zealand's Inland Revenue Department (available here: https://www.classic.ird.govt.nz/resources/1/c/1c6029d0-611c-4a15-9cbf-b712129ab76c/tib-vol31-no7.pdf), what it actually states is as follows (emphasis mine):

The crypto-assets being paid can be converted directly into a fiat currency (on an exchange); and either:
– a significant purpose of the crypto-asset is to function like a currency; or
– the value of the crypto-asset is pegged to one or more fiat currencies.

The bulletin states that they would consider coins designed to be currency, such as bitcoin and litecoin, as well as coins designed for other purposes which can also act sufficient like currency, such as ether, to fall under this categorization, in addition to stablecoins. What they are ruling out is employers trying to make payments in useless altcoins or tokens that aren't easily (or at all) convertible to fiat.

The bulletin even gives an "example scenario" on page 10, which has an employee being paid half of his salary in bitcoin.

I don't think this is necessarily about New Zealand trying to control crypto, but more about them wanting to set up tax regulations, much like the IRS is trying to do in America. Essentially it says if you are paid a gross amount of crypto denominated in NZD, taken as a proportion out of your fiat paycheck (e.g. $1000 of your paycheck will be paid in bitcoin), you will be taxed normally via PAYE on the gross fiat value. If however you are paid a net amount of crypto, then you will need to convert it to the relevant fiat value at time of payment and add it to your PAYE calculation.

[oleg681010]

Isn't that a reason to move to New Zealand? In fact, no, it is better to wait a little, because over time and in our country will do the same.

[timerland]

Read the fine print posted by Kakmakr. They are only really opening the door for stablecoins, not other decentralized options like bitcoin.

I'd say they are looking to implement their own cryptocurrency later on, based on the model of stablecoins and also likely being tethered to their own fiat currency. Look at the structure of the posts, it's pretty obvious they are directly replacing their fiat currency with crypto, so it can't be that different.

Not saying it's a bad idea though. I think more governments integrating blockchain technology is great and allows a lot more growth.

[RealMalatesta]

It is a very much welcome development, I have heard of new Zealand interest in cryptocurrency for a while now, and it’s good that we are gradually getting some countries to fully go into it, at least it is already breaking that chain or string that some countries would have pulled to jointly ask other government to ban crypto, now we have some countries that cryptocurrency is beginning to benefit them and they will never join in the raise.

My issue with this development is still that aspect of salary, because this could cause some serious issue for some of the workers who fully don’t understand the technology yet, and after getting paid, they could just wake up and see that their salary as dropped in price because of bitcoin volatility which they would think they were being underpaid, the best to use to pay salary is actually a stable coin.

[Harlot]

Misleading title they will just like be accepting U.S. Dollar in crypto form because they'll just take in stable coins as salary payment. I know news like this one will always have a catch since the government is not dumb enough to take in normal cryptos because of its volatility which I know will affect their economy especially when these payments are being made in the bear market.

[kooboat]

Some countries are really making good use of blockchain technology by applying it to make life simple for the citizenry. I believe this is the best way for many people to make good use of bitcoin. Blockchain technology can really transform the economy of any nation for good.

[AjithBtc]

Though New Zealand is a small country the initiation to accept cryptocurrencies is really a good move to make everything digitized. As in the article it is a beginning to the usage of stable cryptocurrency developed and backed by the government. Also there is no restrictions for the usage of bitcoin which makes a wider market. Maybe India and other countries that are sticking to ban and other forms of regulating cryptocurrencies can follow these small countries whose focus is truly futuristic.

[boyptc]

Isn't that a reason to move to New Zealand? In fact, no, it is better to wait a little, because over time and in our country will do the same.

In what country you live?

Soon other countries will also do the same but they can't consider volatility of bitcoin so they're likely to pay with stable coins too.

[dothebeats]

What a bummer if they are only forced to use stablecoins for payments. It would be best if people would be able to ask what form of salary/pay can they accept and let the government allow it by giving the companies freedom to do so. But then again, I guess we're far off from that, as the volatility of crypto would make it hard for filing taxes and whatnot, and knowing how fast 1 BTC's value drops or increases, it's just not suitable for companies that need to stick with their budget IMO.

[bitart]

It's not only makes running the economy cheaper if goverments change from coins and banknotes to GovCoin (state running stablecoin), but it makes super easy to trace the routes of the money, they will be able to find out what you buy when you got your salary... (governments was not able or it was really time/energy consuming to trace the routes of the banknotes used on the black market... it was not too effective anyway), so this is good for making the black market a bit more grey or to whiten the grey market a bit...
People won't be afraid of these stablecoins, because it's only digital coin or digital banknote on the smartphone, so it will be hard only for the elder people who don't really use smartphone, so they have to give time for the adoption....

[Nolimitz84]

The New Zealand authorities made the right decision.Even if we are talking about the salary in stablecoins, there are still positive moments.First of all, first of all, there will be no need for the state to spend money on printing money!(still printing bills is also a costly affair).Secondly, New Zealand residents will gradually begin to use, in addition to receiving a salary, products where cryptocurrency is needed. These are decentralized applications, payment for goods and services, etc.,That is, in general, such steps will only strengthen the crypto community.

[hosseinimr93]

For those users who talk about cryptocurrencies volatility, there are two solutions.
1. Pay people with stablecoins.
2. Pay people with bitcoin or other volatile cryptocurrencies at a certain rate according to the market when salaries are being paid.

If they want use option 2, people should accept the risk or be paid by fiat.
I don't think there is a problem. It's like that you receive your salary with fiat and then you buy bitcoin. No one force you to risk.

[Twinkledoe]

For those users who talk about cryptocurrencies volatility, there are two solutions.
1. Pay people with stablecoins.
2. Pay people with bitcoin or other volatile cryptocurrencies at a certain rate according to the market when salaries are being paid.

If they want use option 2, people should accept the risk or be paid by fiat.
I don't think there is a problem. It's like that you receive your salary with fiat and then you buy bitcoin. No one force you to risk.

Also, there are benefits if you choose option 2. Since bitcoin value depends on the market price, there's a chance that you can get your salary higher than what it is, if you know how to trade the money that you received. You can hold your money a lil bit longer and sell it once  the market is in favor with you.

[proTECH77]

Isn't that a reason to move to New Zealand? In fact, no, it is better to wait a little, because over time and in our country will do the same.

Possible if you want to travel down to New Zealand it with.be better because you would be paid coins and not in fiats. Cryptocurrency is gaining momentum and other countries have been involved, I also hope that one day my country will also embrace this technology for the betterment of her.citizens, we are going boom soon .

[Reid]

Read the fine print.... " Most specific of all the conditions is probably the part of the ruling that requires that “the value of the crypto-asset is pegged to one or more fiat currencies.” This suggests that only stablecoins will be usable as payment for salaries, significantly reducing the number of virtual assets that will not raise any violation issues. "

Thank you for this. You saved us a lot of time.
So it aint really about bitcoin.
What is the difference of using plastic cards of banks and this stable crypto currencies.
None actuallly.
It is actually just like Paypal too. The difference is just that their government will be the one controlling it which is worse.
You got loans which are unpaid then they might take it there directly without consent. You will just receive a notice when it is already done.
Better stay with papers.