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A decision by a New Zealand government agency to award a grant to a bitcoin startup has been met with condemnation.

The criticism over the decision by Callaghan Innovation to award Vimba a NZ$315,000 grant has largely come from tech executives. Some have questioned the priorities of the innovation agency saying that there were more deserving startups.

Speaking to the New Zealand Herald the chief digital officer of cybersecurity firm Kordia, Aaron Olphert, alleged that the grant would not have a significant impact on the domestic economy as the startup only has a minimal presence. Besides, Olphert argued, Vimba was looking to expand abroad meaning it would be contributing taxes and jobs to other countries.

Priority Mismatch

There were also those in the New Zealand tech community who felt there were more pressing technological challenges and the taxpayer-funded innovation agency should have instead rewarded startups looking to solve those problems.

“We have real and hard data which shows the direct and tangible benefit that is achieved through communications enhancement, closing the digital divide which is so prevalent and yet they throw cash at these sorts of things like it’s Monopoly money!” said the business development manager of McKay Boats, John Gell.

Amidst the attacks, Vimba, which until recently was known as MyCryptoSaver, has come out fighting. In a statement, Vimba said it deserved the grant as it met the criteria that Callaghan Innovation had set. Vimba now attributes the controversy generated to the impression created in the media that the government of New Zealand was investing in the firm as a venture capitalist when it was actually a rebate.

NZ$126,156 not NZ$315,000

The cryptocurrency trading platform has also pointed that it will only get 40% of their project’s estimated cost:

“As we met the above criteria, Callaghan approved our project grant indicating they will supply 40% of the total estimated cost of our project which was $315,000, this amounts to $126,156 NZD,” said Vimba in a press release. “It is important to note that this money is not just given to us, it is essentially a rebate, we have to spend our own money on the above R&D to receive any money back from Callaghan.”

As recently reported by CCN the crypto trading platform intends to use the grant to improve its software to enable it scale from serving thousands to hundreds of thousands.

This is in anticipation of explosive growth in the cryptocurrency space. In the words of the firm’s CEO, Sam Blackmore, ‘Bitcoin will at least reach the market cap of gold as it is more efficient, more accessible, more secure version of that rare asset’. To get to that point, the price of bitcoin would have to rise to US$600,000.

Featured image from Shutterstock.

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