New Zealand Drops Blanket Ban on Crypto ATMs

McKee said banning any technology is a significant step and should only happen when there is clear evidence that no other effective solution exists.

The New Zealand Government has decided against introducing a nationwide ban on cryptocurrency ATMs, choosing a more balanced approach that focuses on preventing criminal misuse without limiting legitimate access to digital assets. The decision follows a detailed review of earlier plans and reflects a broader effort to modernise the country's anti-money laundering framework while supporting innovation in the financial sector.

Government chooses targeted controls over a full ban

Associate Justice Minister Nicole McKee said Cabinet had initially agreed in principle during June 2025 to prohibit crypto ATMs, though the proposal was always subject to additional policy analysis before becoming law. That review has now concluded that a complete ban would be more restrictive than necessary and that better options are available for managing the risks linked to virtual assets.

McKee said banning any technology is a significant step and should only happen when there is clear evidence that no other effective solution exists. Officials found that while crypto ATMs can be exploited by criminals to convert cash into digital currencies quickly and with limited traceability, they also serve legitimate users, including people who rely on cash and want access to cryptocurrency for investment or personal financial reasons.

The Government believes New Zealand can encourage innovation while still maintaining strong safeguards against financial crime, making a targeted regulatory system a better fit than an outright prohibition.

New powers will allow restrictions if risks increase

Rather than removing crypto ATMs altogether, Cabinet has approved plans to introduce regulation-making powers that would allow the Government to respond as risks develop. These powers could be used to impose limits on the amount of cash that can be used in cryptocurrency transactions or, where strong evidence of harm emerges within New Zealand, restrict cash payments involving high-risk virtual assets.

This flexible approach is designed to give authorities practical tools without creating unnecessary barriers for businesses or individuals using digital assets legally. The Government says it wants regulations that can adapt as technology and financial crime continue to evolve instead of relying on permanent blanket restrictions.

McKee explained that cash remains attractive to organised criminal groups because it is difficult to trace, and once it is converted into cryptocurrencies, money can move across borders rapidly in ways that make investigations more challenging for law enforcement agencies. The proposed powers are intended to strengthen the country's ability to respond quickly if those risks become more serious.

Crypto reforms tied to wider anti-money laundering changes

The decision forms part of the Government's broader overhaul of New Zealand's Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) system, which seeks to make compliance easier for legitimate businesses while making criminal activity more difficult to conceal.

Officials have been directed to consult with cryptocurrency providers, industry participants and users before finalising how the new protections will operate. The discussions are expected to focus on finding practical measures that reduce opportunities for money laundering without discouraging investment or innovation in the growing digital asset sector.

The Government plans to introduce the AML/CFT (Omnibus) Amendment Bill later this month. The legislation will include the new regulation-making powers needed to implement the revised approach, giving future governments the ability to respond to emerging risks through targeted rules instead of relying on a permanent nationwide ban.