Australian government approves world-leading crypto reforms
According to reports, the Australian government is considering rolling out of a central bank digital currency (CBDC), besides backing several forward-looking regulatory crypto-proposals – all of which is a part of an upcoming “payments and crypto reform plan.”
Josh Frydenberg, the Treasurer, has said that the new reforms would “firmly” place Australia among the handful of leading countries in the world in the domain.
The reform plan is being tagged as the biggest change in the payments system of the country since the 1990s, with much of the crypto-focused groundwork laid by innovative proposals by the Australian Senate Committee in September 2021.
As per the Australian Financial Review, the government has favoured six out of the total nine reforms that have been proposed by the Senate Committee. Some of these include a licensing regime for crypto exchange firms, laws that govern decentralized autonomous organizations and a common access programme for new payments platforms.
Two proposals related to taxation and financial compliance have been referred so far to their respective government bodies in order for consideration, whereas the government has sent another proposal on renewable energy Bitcoin mining taxation discounts.
Liberal Party’s Treasurer and Deputy Leader, Josh Frydenberg, has outlined the government’s plans for crypto regulation, CBDCs and taxation in a speech at the Australia-Israel Chamber of Commerce (AICC).
Frydenberg also said that it is clear that if the country “embraces” the developments, the country has an “enormous opportunity” for capitalizing on the convergence between finance and technology.
About CBDCs, an official in the senior government has told The Australian on December 7 that a retail scale “Reserve Bank of Australia-backed Bitcoin or cryptocurrency” is on the talks, and it would be a “key element” of the government’s regulatory reform concerning digital payments.
During his AICC speech, Frydenberg had spoken “bullishly” about the crypto asset reform, where he said that for businesses, the reforms would address “the ambiguity” that could exist about the regulatory and taxation treatment of crypto assets as well as new payment methods.
He said that in doing so, it would drive even more consumer interest, thus driving more innovation, in addition to facilitating multiple new entrants.
He has also added that for consumers, these changes would establish a regulatory framework for underpinning their growing use of crypto assets while clarifying the treatment of new payment methods.
One Senate committee’s proposal has said that the government is set to ignore the 10 per cent taxation discount for Bitcoin miners who are using renewable energy.
Michael Harris, Swyftx’s Head of Corporate Development, has said that he opines it is a “political consideration” when the reality is that it would be difficult for the government to segregate out the Bitcoin mining industry from other energy consumers, “however laudable the intention” is.
Harris has also said that overall the “noises” from the government “are promising” as they seem to have recognized the need for introducing consumer protection laws without stifling innovation.
Senator Andrew Bragg, who is known for his crypto-friendly views, said that Australia would become a world leader in crypto under “the Treasurer’s plan.” Australian consumers would also benefit from new consumer protection rules, he said.
CEO of BTC markets, a local crypto exchange firm, Caroline Bowler, has welcomed the reforms, adding that they are a “major step forward” to upgrading Australia’s “one-size-fits-all” regulatory framework.
Bowler also said that “it was great to see that the gaps in Australian regulation in relation to digital financial products as well as the exchanges that support them are being addressed “at the highest level of authority,” and that the Coalition Government was no more shying away from “the big issues” that surround crypto, digital payments and de-banking.