New Zealand: A Ban That Was Reversed Ten Days Before This Article Was Written
New Zealand's government scrapped a proposed crypto ATM ban just ten days before this article was written — choosing targeted cash limits instead, though the details still aren't published.
● Grey
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220+
Crypto ATMs already operating
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10 Jul 2026
Date the proposed ban was reversed
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13 months
How long the ban sat unresolved before reversal
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Operating a crypto ATM in New Zealand is legal, and the country already hosts over 220 machines from operators including CoinFlip and Localcoin — the same Localcoin that runs GENERAL BYTES' largest network in neighbouring Canada.1,2 New Zealand does not run a standalone crypto licensing regime; instead, virtual asset service providers register on the Financial Service Providers Register (FSPR) and are supervised under the AML/CFT Act 2009, primarily by the Department of Internal Affairs (DIA).3,4 The reason this market deserves particularly close reading right now is timing: in June 2025, Cabinet agreed in principle to ban crypto ATMs outright; on 10 July 2026 — just before this article was written — the government reversed that decision, explicitly rejecting a blanket ban in favour of targeted cash-transaction limits to be introduced through the AML/CFT (Omnibus) Amendment Bill this month.5,6 The advantage for an operator is that New Zealand has now demonstrated, in real time, a willingness to step back from prohibition once it examined the evidence more closely; the obstacle is that the replacement regime — cash-transaction limits, and a reserved power to prohibit high-risk virtual-asset cash payments if harm evidence emerges — is not yet drafted, and banking access for crypto businesses has reportedly been difficult enough that most NZ-based operators have already been de-banked.6,7 As in most markets on our legislation map, General Bytes as a hardware and software vendor is not itself performing a licensable activity; it is the in-country operator of the machines who must register. For GENERAL BYTES, New Zealand is a small but live market where the immediate regulatory crisis has just passed, but the practical detail of the replacement rules — and their effect on Localcoin's cross-Tasman operations — is still being written.
Last updated: July 2026
Regulatory Framework and Its Evolution
New Zealand has deliberately not built a standalone crypto-asset licensing framework, instead extending its existing financial-services and AML/CFT architecture to cover virtual asset service providers (VASPs).3 Any business providing crypto-related financial services in New Zealand must register on the FSPR under the Financial Service Providers (Registration and Dispute Resolution) Act 2008, and will almost always be captured as a reporting entity under the AML/CFT Act, supervised primarily by the DIA (with the FMA and Reserve Bank handling narrower categories of business).3,4 A 2023 amendment act updated New Zealand's VASP definitions to align more closely with FATF standards, and DIA guidance now treats virtual-asset-to-virtual-asset and virtual-asset-to-fiat transfers as wire transfers, pulling them into the same international wire-transfer scrutiny as bank transfers unless all parties are confirmed to be in New Zealand.8,9
The regime is actively evolving in 2026: CARF tax-reporting obligations took effect on 1 April 2026, and the FMA has been developing a fintech sandbox and a new restricted "on-ramp" licence intended to give crypto-adjacent startups a more clearly supervised entry path.10 Crucially for ATM operators, the notable travel rule that applies to bank wire transfers has not yet been separately implemented for crypto specifically, though the wire-transfer reclassification described above achieves much of the same practical effect.
Getting Registered: FSPR Plus AML/CFT Reporting-Entity Status
There is no discretionary licence to apply for in the EU or FINMA sense — registration on the FSPR is largely a disclosure-based process, and reporting-entity status under the AML/CFT Act follows automatically once a business's registered activities are classified as covering crypto-related financial services.3,4 In practice this makes New Zealand's formal entry barrier lower than most markets on our legislation map — there is no capital threshold, licensing fee, or lengthy discretionary review comparable to a MiCA CASP authorisation. The real work is building and maintaining the AML/CFT compliance programme itself: a documented risk assessment, ongoing monitoring, suspicious activity reporting, and — since the March 2026 FSPR update — an explicit annual declaration of AML/CFT reporting-entity status and the identity of the supervising authority.11 As with the rest of our legislation map, this registration sits with the in-country operator of the machines, not with General Bytes as hardware and software vendor.
AML and KYC
New Zealand's AML/CFT Act requires reporting entities to verify customer identity in specified circumstances, monitor for suspicious activity, and assess money-laundering and terrorism-financing risk — a full-KYC framework rather than an anonymity-tiered one.12 The government's own stated rationale for considering ATM-specific restrictions centres on exactly the anonymity/speed combination this article flags throughout our legislation map: officials specifically noted that criminals use cash to move funds into virtual assets "quickly and anonymously" through ATMs, which is precisely why the incoming AML/CFT (Omnibus) Amendment Bill targets cash-transaction limits rather than leaving the channel unaddressed.6 Operators should expect a maximum per-transaction or cumulative cash threshold to be defined once the Bill's regulation-making powers are exercised, and should not assume current practices will remain unchanged once that detail is published.
Banking
Banking is New Zealand's weakest point for this business model. Industry reporting describes de-banking as having washed out most NZ-based crypto ATM operators already, leaving foreign-headquartered networks such as CoinFlip and Localcoin as the visible survivors in the market.7 This suggests New Zealand banks are applying a materially more cautious risk appetite to this sector than their counterparts in, for example, Switzerland or Germany, and that any operator — local or foreign — should expect banking relationships to require active, ongoing management rather than a one-time onboarding conversation.
The Next 24 Months: From Ban to Cash Limits, Detail Still Pending
The regulatory story here moved unusually fast and just reversed direction. Cabinet's June 2025 in-principle agreement to ban crypto ATMs outright sat unresolved for over a year while officials completed further policy analysis; New Zealand's roughly 220–221 machines kept operating throughout that period.13,1 On 10 July 2026, Associate Justice Minister Nicole McKee announced Cabinet had reconsidered and explicitly rejected the blanket ban, stating that "banning something is a serious decision that should not be taken lightly" and that crypto ATMs have legitimate users alongside genuine criminal-misuse risks.5,14 In its place, the forthcoming AML/CFT (Omnibus) Amendment Bill — expected to be introduced later in July 2026 — will create regulation-making powers letting government set maximum cash-transaction thresholds for virtual-asset purchases, with a reserved, evidence-contingent power to prohibit cash payments for high-risk virtual assets entirely if harm indicators emerge later.6,15
Banning something is a serious decision that should not be taken lightly.
— NICOLE MCKEE, ASSOCIATE JUSTICE MINISTER, ON REJECTING THE BLANKET BAN
This is good news relative to Canada's still-unresolved proposal, but it is not a green light for unconstrained growth: the specific transaction limits have not yet been published, and the government has explicitly kept a prohibition option in reserve. For GENERAL BYTES, the practical read is that New Zealand's acute regulatory risk has just meaningfully reduced, but the operating parameters for Localcoin's New Zealand machines (and any future GENERAL BYTES-linked deployment) will be set by regulations that do not exist yet. This is a market to watch closely over the next few months as the Omnibus Bill's cash-limit provisions take shape, rather than one to treat as settled.
Sources and references
1. NZ crypto ATM count (~220-221 machines, CoinFlip/Localcoin) — cryptocurrency.org.nz
2. Localcoin's presence in both Canada and New Zealand — cryptocurrency.org.nz
3. FSPR registration requirement, no standalone crypto licence — minterellison.co.nz
4. DIA as lead AML/CFT supervisor for VASPs — dia.govt.nz
5. 10 July 2026 reversal of blanket ban decision — thelawyermag.com
6. AML/CFT (Omnibus) Amendment Bill and cash-limit regulation-making powers — opengovasia.com
7. De-banking washing out NZ-based operators — cryptocurrency.org.nz
8. 2023 VASP definitions amendment aligning with FATF — tookitaki.com
9. Virtual asset transfers reclassified as wire transfers — minterellison.co.nz
10. CARF reporting from April 2026, FMA sandbox and on-ramp licence — anuragverma.co
11. FSPR AML/CFT reporting-entity declaration requirement (March 2026) — dia.govt.nz
12. AML/CFT Act customer verification and monitoring obligations — fma.govt.nz
13. June 2025 in-principle Cabinet decision to ban crypto ATMs — anuragverma.co
14. Minister McKee's statement on rejecting the blanket ban — newswire.co.nz
15. Reserved future power to prohibit high-risk cash payments — 1news.co.nz
Legal Disclaimer: This article by GENERAL BYTES is for informational purposes only and does not constitute formal legal, financial, or investment advice. New Zealand's crypto ATM policy changed direction on 10 July 2026 and the replacement AML/CFT (Omnibus) Amendment Bill's specific cash-transaction limits are not yet published; always consult specialised local legal counsel and confirm current DIA and FSPR requirements before considering market entry.