Australia has joined the number of countries planning to regulate the cryptocurrency sector, with the government announcing plans for a major overhaul of payments system reforms that will also target digital currencies.
The planned regulations will mainly focus on crypto-taxation, investor protection and the regulation of digital banks and exchanges, Australia News reports.
According to the country’s Financial Services Minister, Jane Hume, the government aims to ensure that all crypto players operate within a regulatory ecosystem amid increased adoption of various assets.
“The government can no more guarantee your crypto than they can guarantee a painting or a share in a company, and neither should they. But we can ensure that Australian exchanges, depositories and brokers operate within a better, safer and more secure regulatory framework,” she said.
Australia’s intention to regulate crypto emerged in 2021 after Treasurer Josh Frydenberg hinted that the state intended to announce new laws.
In line with planned regulations, the government is set to unveil three key documents aimed at reforming the payments industry. A document aims to gather the views of key players on the licensing of digital assets alongside custody.
Notably, one of the Treasury’s recommendations was to require crypto exchanges to hold the assets of Australian investors ashore.
Additionally, the document will also reveal the outcome of two crypto industry surveys which will contain the terms of reference. The investigation is being conducted by Australia’s competition and finance agencies.
Minimize the tax burden
Regarding taxes, the Board of Taxation (BoT) should offer a comprehensive report to the government on the appropriate policy framework for cryptocurrencies. Interestingly, the government wants BoT to minimize the tax burden while offering recommendations for the crypto sector.
Lawmakers across the country have been at the forefront of crypto regulation led by Senator Andrew Bragg. In particular, the government is expected to consider some of Senator Bragg’s recommendations, including the report concluded that Australia’s current regulations were not fit for purpose.
The report also called on the Australian government to conduct a policy review of the viability of a retail central bank digital currency (CBDC) in Australia.
Recently, Bragg called on the government to consider hiring experts to craft crypto regulations in a dedicated unit.
Along with the reforms, the Treasury is working on designing a crypto market license alongside local custody requirements. The results should be published in May.
Apart from the lack of clarity in Australia’s crypto regulations, the country has built a reputation as a digital currency-friendly jurisdiction hosting several related businesses.