The Australian government is seriously considering the launch of the central banking digital currency (CBDC) and has backed many progressive regulatory cryptocurrency proposals as part of a new “payments and crypto reform plan.”
Treasurer Josh Frydenberg says the reforms “will firmly put Australia among a handful of leading countries in the world.”
The reform plan is said to be the biggest shake-up of the Australian payment system since the 1990s, with part of the crypto-related base set up by the innovation proposals presented by the Australian Senate Committee in September.
According to the Australian Financial Review, the government is in favor of six of the 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 payment platforms.
Two proposals related to tax and financial compliance were reported to their respective government bodies for consideration, while the government countered another proposal related to renewable energy Bitcoin mining tax rebates.
MD @ChloeWhiteAus cited in the AFR on crypto regulation. The article includes a helpful summary table of the Government’s response to recent cryptocurrency proposals, signaling the way forward on regulation in Australia. See more: https://t.co/q9ZLuf4r4b pic.twitter.com/ZxmiwoDdjQ
– Genesis Block Advisory (@GenesisBlockAus) December 7, 2021
Treasurer and Deputy Leader of the Liberal Party Josh Frydenberg sketched the government’s plans for crypto regulation, taxation and CBDCs in a speech today at the Australian-Israeli Chamber of Commerce (AICC).
“What is clear is that if we accept these developments, Australia has a huge opportunity to benefit from the convergence between finance and technology,” he said.
As for CBDCs, an unnamed senior government source told The Australian on December 7 that retail scale “RBA [Reserve Bank of Australia] 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 optimistically about cryptocurrency reform:
“For businesses, these reforms will address the ambiguity that may exist about the regulatory and tax treatment of cryptocurrencies and new payment methods. By doing so, it will stimulate even more consumer interest, facilitate even more new entrants and enable even more innovation to occur. . ”
“For consumers, these changes will set up a regulatory framework to support their growing use of cryptocurrencies and clarify the treatment of new payment methods,” he added.
One proposal by the Senate committee that the government seems to be ignoring is the 10% tax cut for Bitcoin (BTC) 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 will probably be difficult for any government to separate an industry like BTC mining from other energy consumers, no matter how commendable the intention.”
Harris said, however, 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.
“However, the devil will be in the details and we especially want to avoid a system that reduces a customer’s choice by accumulating the decks in favor of large traditional financial players.”
Related: Australian women owning crypto doubled in 2021: Survey
Crypto-friendly Senator Andrew Bragg, who led the recent crypto proposals, told Cointegraph in a statement that Frydenberg’s crypto and fintech reform plan would put “Australia on the technical map”:
“Australia will be a world-leading cryptocurrency center according to the Treasurer’s plan. Australian consumers will also benefit from new consumer protection rules.”
“The world is looking at Australia, which is now setting the global standard for crypto, payments and digital wallet reform,” he added.
Caroline Bowler, the CEO of local cryptocurrency exchange BTC Markets welcomed the reforms, calling them a “An important step forward in updating Australia’s one-size-fits-all regulatory framework in real time.”
“It is good to see that the shortcomings in Australian regulation in relation to digital financial products and the exchanges that support them are ultimately being addressed at the highest level of authority, and the Coalition Government is not running away from the big problems around crypto, payments and banking. She said.