Bitcoin tends to be the entry point to trade in other cryptocurriencies.

BitPrime, a Christchurch-based brokerage, is the only firm in the world to offer a direct exchange of cryptocurrencies ethereum and ripple for New Zealand dollars.

Founder Geoff Palmer said his operation has grown rapidly since its launch three months ago, overseeing the exchange of over $600,000.

New Zealand investors have had to use bitcoin to invest in other cryptocurrencies, but would now have other option, Palmer said.



App developer Ian Meredith has invested about $15,000 in cryptocurrencies, primarily in ethereum.



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Meredith said he knew the investment was "very risky" and something his friends who invest in stocks would not go near, but to him it was an "investment in the future".

123RF Geoff Palmer says banks refused to open accounts for his business citing risks under anti-money laundering legislation.

​The Reserve Bank regards cryptocurrencies as a "vulnerability" and considers cryptocurrency as a payment system rather than a currency.

Palmer said most banks refused to deal with businesses, including his, that dealt with cryptocurrencies citing risks under anti-money laundering law.







University of Auckland Business school professor Alex Sims is leading a team developing the Trans-Tasman framework for blockchain and cryptocurrencies.



Blockchain acts like a public ledger for cryptocurrency transactions made up of a network of computers that process transactions.

This safeguards the system, because the network of servers would need to be individually hacked in order for the transaction amount to be altered – an impossible task, Sims said.

EDDIE JIM/FAIRFAX MEDIA Bitcoin can be also bought at dedicated ATM machines overseas.

Sims said the lack of regulation, and banks behaviour towards cybercurrency businesses was short-sighted.

"It's almost like you can't stop it so we should try and get something that mitigates against the risks."

Palmer said he used personal bank accounts to oversee money transfers to avoid being "locked out" of banks and by using only bank transfers to accept money he ensured the transactions complied with anti-money laundering laws.

All cryptocurrencies use blockchain technology, but each currency has distinct features, said Sims.

﻿Ripple is a private currency designed by banks and controlled by a central entity.

Ethereum allows users to create "smart contracts" that make an exchange of currency contingent on whatever the contract demands, like a deed transfer.

Sims said coding "smart contracts" could have a use in facilitating payment between self-driving cars and people, and each contract needs a little "ether" to be executed.

"That's why ethereum has gone up so much in value, because it has a practical use."

The price of ethereum has risen from US$8 (NZ$11) to US$260 in the past year.