Last month’s Senate Committee demonstrated how Australia can become a forward-leaning, global hub for crypto
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An Australian Senate Committee has recommended a new set of rules to establish a working framework for the cryptocurrency sector, providing a roadmap for Australia to leap forward in the way it regulates digital asset products.
There is huge potential for economic benefit for Australia if the government and legislators can create a forward-leaning environment for new and emerging digital products.
That was a crucial takeaway from last week’s Senate Select Committee on Australia as a Technology and Financial Centre, led by Senator Andrew Bragg. The report was based on more than 100 submissions and set out 12 key recommendations, leaving few in doubt that Australia could become a new hub for cryptocurrency and related businesses.
The recommendations provided significantly greater clarity on how digital assets and digital asset-adjacent services should be regulated.
The regulation of digital currencies, or lack thereof in Australia to this point, has been stifling for the sector as legitimate businesses establish themselves.
But that looks set to change, with recommendations in the Senate Committee’s report having the potential to be a significant moment in the future regulation of assets. The fragmented and haphazard nature of often-decades old laws covering new technology could be a thing of the past, some of the recommendations placing Australia at the global forefront of digital asset regulation if enacted.
Among the recommendations were a new licensing regime for crypto exchanges, establishing a custody or depository regulatory framework to protect consumers, and amendments to the company tax and CGT regimes to make them digital-asset friendly.
The Senate Committee also recommended the government set up a new Decentralised Autonomous Organisation Structure.
The majority of recommendations fall into one of three categories. Those which make it easier for businesses to innovate in the space, those which make it easier to conduct business with emerging digital products, and those which provide a safer and more advantageous environment for investors (including SMSFs) to participate.
In the report, Senator Bragg said Australia has the potential to be “a leader in digital assets”.
“This means Australians can access new choices and lower prices. It means Australians can have more control of their financial destiny rather than being dependent on endless intermediation.”
There are other positive signs too, with Commonwealth Bank becoming the first Australian bank to allow customers to hold and access cryptocurrencies via its app. It is one of only a few banks worldwide enabling that, and other local banks are likely to follow.
From here, the Committee recommendations still need to go to the Senate, which itself is just the start of a process that will ideally see a bill drafted and then voted on both in the Senate and House of Representatives.
But if the political process is able to deliver on all three, it will create an innovation opportunity that positions Australia at the pointy end of the most significant digital revolution the world has seen.
This article was developed in collaboration with Dacxi, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.