A Senate committee in Australia has made a number of suggestions to address the absence of adequate cryptocurrency laws. The MPs think that new laws are needed for the country’s fintech and digital asset businesses to compete with countries that are already luring some of its own crypto firms.
Many governments have been taken off guard by the quick growth of the crypto sector, but although other countries have already provided some legal clarity to market players, Australia has yet to adopt more specific laws for associated businesses. According to the Select Committee on Australia as a Technology and Financial Centre, which just released a fresh report on the subject, revised rules should allow the country to promote innovation.
The committee has made a number of recommendations to address concerns hurting the competitiveness of Australia’s IT, banking, and digital asset industries. The issues raised by interested parties involve the regulation of cryptocurrencies and related assets, the “de-banking” of fintech and other creative firms, and the existing regulatory climate for digital financial institutions, or “neobanks.”
As a first step, Australian senators have requested that the government develop a licensing framework for digital currency exchanges that addresses issues such as capital sufficiency and audits. Despite the fact that these trading platforms frequently trade billions of dollars in crypto assets, the authors of the research highlight that present laws are restricted and merely require them to register with the country’s financial intelligence agency, Austrac. Uncertainty is believed to be a problem for firms, investors, and consumers. The committee observes:
Two prominent Australian-founded digital currency exchanges (DCEs) have recently gained regulatory licenses in Singapore and the UK respectively, showing what Australia is missing out on by not developing an appropriate framework here.
Senators have also advocated the creation of an unique legal structure for “Decentralized Autonomous Organisations.” The reasoning for this decision is to “ensure that emerging types of blockchain-based organisations can be established with clarity as to how they can operate in Australia.”
The committee believes that a review of Australia’s anti-money laundering and counter-terrorism funding legislation is essential in order to prevent impeding innovation and ensure that these standards are “fit-for-purpose.” The senators add that applicable taxation laws need to be clarified further, noting that digital asset transfers only trigger a capital gains tax event where they truly result in a clearly identifiable capital gain or loss. The research recommends a 10% tax break for Australian bitcoin miners who use their own renewable electricity.