The Government has abandoned plans for a blanket ban on cryptocurrency ATMs, opting instead for a more targeted regulatory approach aimed at preventing criminal misuse while allowing legitimate users continued access to the technology.
Associate Justice Minister Nicole McKee said Cabinet had reconsidered its earlier in-principle decision, made in June 2025, to prohibit crypto ATMs following further policy analysis. The review concluded that an outright ban was not the most appropriate response.
“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.”
The Government acknowledged that crypto ATMs can be exploited by criminals to rapidly convert cash into virtual assets, making it easier to move money across borders while reducing traceability. However, officials also found the machines serve legitimate purposes, including providing cash-reliant New Zealanders with access to cryptocurrency investments.
Instead of prohibiting the machines, Cabinet has agreed to create regulation-making powers allowing future restrictions on cash transactions involving virtual assets. These measures could include maximum transaction limits or, if evidence of significant harm emerges, bans on cash payments for higher-risk virtual assets.
McKee said the approach would provide flexibility to respond to evolving risks without unnecessarily restricting lawful businesses and consumers.
“These decisions form part of the Government’s wider reform of New Zealand’s Anti-Money Laundering and Countering Financing of Terrorism system, aimed at making it easier to do business and harder to commit crime,” she said.
She noted that cash remains attractive to organised crime because of its limited traceability, and converting it into cryptocurrencies enables funds to be transferred internationally with greater speed and anonymity.
The Associate Minister said the Government was seeking to balance innovation with effective crime prevention, adding that officials had been instructed to consult with cryptocurrency providers and users on practical safeguards.
The proposed changes will be included in the AML/CFT (Omnibus) Amendment Bill, which is expected to be introduced later this month.
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