The Australian government is seriously considering the rollout of a central bank digital currency (CBDC) and has backed numerous forward-looking regulatory crypto proposals as part of a new “payments and crypto reform plan.”
Treasurer Josh Frydenberg said the reforms “will firmly place Australia among a handful of lead countries in the world.”
The reform plan is said to be the biggest shake-up of the Australian payments system since the 1990s, with part of the crypto-related groundwork set by the innovative proposals put forward by an Australian Senate Committee in September.
According to the Australian Financial Review, the government is in favor of six out of nine reforms proposed by the Senate Committee, including a licensing regime for crypto exchanges, laws to govern decentralized autonomous organizations, and a common access regime for new payments platforms.
Two proposals relating to tax and financial compliance have been referred to their respective government bodies for consideration, while the government has knocked back another proposal related to renewable energy Bitcoin (BTC) mining tax discounts.
MD @ChloeWhiteAus quoted in the AFR on crypto regulation. The article includes a helpful summary table of the Government's response to recent crypto proposals, signalling the path forward on regulation in Australia See more: https://t.co/q9ZLuf4r4b pic.twitter.com/ZxmiwoDdjQ— Genesis Block Advisory (@GenesisBlockAus) December 7, 2021
Frydenberg outlined the government’s plans for crypto regulation, taxation and CBDCs in a speech on Wednesday at the Australia–Israel Chamber of Commerce (AICC).
“What is clear is that if we embrace these developments, Australia has an enormous opportunity to capitalize on the convergence between finance and technology,” he said.
Concerning CBDCs, an unnamed senior government source told The Australian on Tuesday that a retail scale “RBA [Reserve Bank of Australia] backed Bitcoin or cryptocurrency” is currently being considered and will be a key element of the government’s regulatory reform on digital payments.
During his AICC speech, Frydenberg spoke bullishly on the crypto asset reform:
“For businesses, these reforms will address the ambiguity that can exist about the regulatory and tax treatment of crypto assets and new payment methods. In doing so, it will drive even more consumer interest, facilitate even more new entrants and enable even more innovation to take place.”
“For consumers, these changes will establish a regulatory framework to underpin their growing use of crypto assets and clarify the treatment of new payment methods,” he added.
One Senate committee proposal the government looks set to ignore is the 10% tax discount for Bitcoin miners who use renewable energy. Michael Harris, head of corporate development at local exchange Swyftx, told Cointelegraph:
“We think this was a political consideration. The reality is that it’s probably going to be difficult for any government to segregate out an industry like BTC mining from other energy consumers, however laudable the intention.”
However, Harris said that overall, the “noises coming out of government at the moment are promising,” as the government seems to have recognized the need to introduce consumer protection laws without stifling innovation.
“The devil will be in the detail, though, and we are especially keen to avoid a system that reduces customer choice by stacking the decks in favor of big, traditional financial players.”
Crypto-friendly Senator Andrew Bragg, who drove the recent crypto proposals, told Cointelegraph in a statement that Frydenberg’s crypto and fintech reform plan will put “Australia on the tech map”:
“Australia will be a world-leading crypto hub under the Treasurer’s plan. Australian consumers will also benefit from new consumer protection rules.”
“The world is watching Australia, which is now setting the global standard for crypto, payments and digital wallet reform,” he added.
Caroline Bowler, CEO of local crypto exchange BTC Markets, welcomed the reforms, calling them a “major step forward to upgrade Australia’s one-size-fits-all regulatory framework in real-time.”
“It’s great to see that the gaps in Australian regulation relating to digital financial products and the exchanges who support them are being finally addressed at the highest level of authority, and the Coalition Government is not shying away from the big issues surrounding crypto, payments and de-banking,” she said.