The Government has dropped its plan to ban cryptocurrency ATMs and will instead bring in targeted rules to control how much cash people can push through the machines. Associate Justice Minister Nicole McKee announced the change on Thursday, saying Cabinet had looked again at the evidence and decided a blanket ban went too far.
The reversal walks back a decision made just over a year ago. In June 2025 Cabinet agreed in principle to ban the machines outright, subject to further policy work, as part of a wider overhaul of New Zealand’s anti-money laundering and counter-terrorism financing rules. That further work has now been finished, and it landed on a different answer.
“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.”
Crypto ATMs look like ordinary cash machines but let a person feed in banknotes and receive cryptocurrency in a digital wallet, usually within a couple of minutes. New Zealand has more than 220 of them, according to figures cited by the Ministerial Advisory Group on Transnational, Serious and Organised Crime earlier this year. They have become a well known feature of scams, because a victim being coached over the phone by an offshore fraudster can be talked into converting cash into crypto that is then moved overseas almost instantly and is very hard to claw back.
McKee did not pretend those risks were imaginary. She said crypto ATMs present real risks, particularly where criminals use cash to move funds into virtual assets quickly and anonymously. But she argued the machines also have legitimate users, including people who rely on cash and want a way to buy digital assets, and that the answer was to manage the risk rather than shut the door completely.
“New Zealand should be a country that welcomes innovation while taking criminal misuse seriously,” she said, adding that the new approach was meant to leave space for legitimate business, investment and personal choice.
In place of a ban, Cabinet has agreed to set up regulation-making powers that let the Government put limits on cash transactions for virtual assets. In practice that means officials could set a maximum dollar amount a person is allowed to convert through a machine in a single transaction. The powers would also allow a full ban on cash payments for high-risk virtual assets later on, but only if clear evidence of harm shows up in New Zealand. So the outright ban has not been ruled out forever. It has been parked as a last resort rather than a starting point.
The new powers will be folded into the Anti-Money Laundering and Countering Financing of Terrorism Omnibus Amendment Bill, which the Government expects to introduce later this month. McKee said she had asked officials to talk to crypto providers and users about how the protections should work before the detail is locked in, which suggests the actual transaction caps are still to be settled.
The shift is a small win for a local crypto sector that had warned an outright ban would punish a lawful industry for the behaviour of criminals who have plenty of other ways to move money. It is also a reminder of how quickly policy can turn when the analysis catches up with the announcement. The 2025 decision was made in principle and sold as part of a tough line on organised crime. A year of closer work has produced something more measured.
Not everyone will be comfortable with the softer landing. The machines have been linked to real losses for real people, and consumer advocates have argued for years that the speed and anonymity of cash-to-crypto conversion is exactly what makes them dangerous. A transaction cap only helps if it is set low enough to matter, and that number does not exist yet. Until the bill is written and the regulations are drafted, it is hard to say how much practical difference Thursday’s decision will make to someone standing in front of one of these machines being told by a stranger on the phone to keep feeding in cash.
What the decision does show is a Government willing to change its mind in public in an election year, which is not always the easy option. The 2026 general election is set for 7 November, and crime, cost of living and the reach of the state are all live arguments on the campaign trail. How the coalition handles the fine print of the crypto rules, and whether the caps end up strict or generous, will say a lot about where it wants to sit between protecting people from scams and getting out of the way of new technology.
You can read the Government’s announcement on the Beehive website, and RNZ has more detail on how the reversal came about.
With the election approaching, it is worth knowing where each party stands on issues like this. You can compare their positions using our voting tool.
What do you think, should the Government have gone ahead with a full ban on crypto ATMs, or are targeted limits the smarter call? Have your say in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job π
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