Government backs down from banning crypto ATMs

The government is backing down from an earlier move to ban cryptocurrency ATMs, opting to put in guardrails instead.

In June 2025, Cabinet agreed in principle to ban crypto ATMs as part of an overhaul of the Anti-Money Laundering/Countering Financing Terrorism (AML/CFT) regime.

However, Associate Justice Minister Nicole McKee announced a back-down on Thursday, saying it would take a "targeted and proportionate" measure instead.

She said the previous Cabinet decision was subject to further policy analysis, and that analysis had found that a more flexible approach was available.

"Banning something is a serious decision that should not be taken lightly," McKee said.

"Cabinet has now considered the evidence and agreed that a blanket ban is not the right response at this time."

She said crypto ATMs presented real risks, particularly where criminals used 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," McKee said.

"New Zealand should be a country that welcomes innovation while taking criminal misuse seriously."

McKee said Cabinet had agreed to establish regulation-making powers to 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," she said.

"This gives the government practical tools to respond to risk while preserving space for legitimate business, investment, and personal choice."

The government said the AML/CFT (Omnibus) Amendment Bill would be introduced later this month, and would incorporate a regulation-making power to reflect the cabinet decision.