Submission: Inquiry into the current and future nature, impact, and risks of cryptocurrencies

Published September 3, 2021 · Updated September 3, 2021

About the New Zealand Council for Civil Liberties

The New Zealand Council for Civil Liberties is a voluntary, not-for-profit organization which advocates to promote human rights and maintain civil liberties.

The Council welcomes this inquiry. The Council has been recommending that Parliamentary Select Committees undertake inquiries, like this one, which strengthen scrutiny of the government.

The Council believes that people’s liberty and dignity is preserved when they are able to make personal purchases anonymously. The increasing digitisation of our society includes the way in which people receive and spend money. This digitisation reduces the costs and increases the opportunity for surveillance of our everyday actions, such as what we choose to spend our money on. The most anonymous way of receiving or spending money is through the use of cash. But even with spending using digitally-enabled transfers of money (EFTPOS, credit cards, bank transfers) the precise reduction of privacy can be adjusted through regulation on who can access this data, and what they are permitted to do. The Council believes that people’s privacy, autonomy and dignity is being harmed by the difficulty which people today have in spending money anonymously. This in turn affects the kind of society we live in.

The Council notes that all of the political parties in parliament understand the value in allowing anonymous donations to political parties. Governments have continued to enable this, despite concerns about buying influence and access, because they believe it enables the exercise of political ‘speech’. The Committee will therefore be able to see a clear connection between privacy-preserving forms of spending and the protection of people’s other human rights.

The Council notes that today’s cryptocurrencies are pseudonymous, not anonymous. People who use cryptocurrency are identifiable, unless they take additional security measures which are more elaborate than the cryptocurrency’s pseudonymity. Greater adoption of cryptocurrencies will therefore add to the existing harms to people’s privacy from surveillance of their income and spending.
The Council is concerned that proponents of cryptocurrencies make too many claims which are poorly supported or simply untrue. We note that whilst journalists who work on the share market are forbidden from writing about the shares they hold as it would be a conflict of interest, most writing about cryptocurrencies comes from people who are invested in them. [1][2]
The Council notes that most of the properties which cryptocurrencies claim are disputed, while the negative side effects are well proven.

The Council notes that there are numerous non-technical confidence schemes and pyramid schemes active in cryptocurrency today. The Council does not believe that new powers are the correct mitigation for the damage that these crimes are doing to our community.

The Council believes that Aotearoa benefits from the anonymity of paper and coin currency, and supports greater privacy protection for data on people’s spending.