In addition, anti-money laundering and countering financing of terrorism (AML/CFT) legislation might create significant hurdles for financial entities to associate with cryptocurrencies. AML/CFT legislation requires financial institutions to know their customers, which is at odds with distributed pseudo-anonymous crypto-currencies. Crypto-currency issuers and crypto-currency exchange platforms would need to remove anonymity from cryptocurrencies to implement AML/CFT.
The Reserve Bank does not currently plan to issue any new regulation regarding privately issued crypto-currencies as they do not currently pose a systemic risk to financial stability. 15 Moreover, existing prudential regulation and AML/CFT legislation already set out that supervised entities should manage their business prudently and know their customers. Conclusion The gold rush began in New Zealand in 1861.