Australia announces crypto regulatory reform

Australia is set to announce on Wednesday (December 8th) plans for far-reaching reforms to the regulation of its payments system, including the creation of a “thoughtful regulatory framework” for cryptocurrencies.

Qualify the plans of such a framework of “world leader” in a local maintenance, Australian Treasurer Josh Frydenberg said: “We are bringing this area out of the shadows. We want companies that buy and sell cryptocurrency to be properly licensed. “

The goal, he added, is to “provide greater certainty and security for people who transact” in cryptocurrencies.

The number of such people seemed to be less certain, as Frydenberg estimated that there are 800,000 Australians who own or have owned a cryptocurrency. That’s well below the numbers reported by a recent online survey, which found that nearly 18% of Australians own crypto, or more than 4.5 million people.

The test of time

The broader reform plans will see the biggest changes to the country’s payments system in 25 years, Frydenberg noted. “We are modernizing the payment system,” he said. “We are broadening the definition of services and products that can be regulated. “

The government also plans to make its regulatory framework sustainable by giving the Treasurer and the Reserve Bank of Australia greater authority to guide policy across the payments systems industry, so that it can more effectively address emerging shortcomings. and emerging from the regulatory regime.

“There is a digital revolution underway in our payment system,” said Frydenberg, noting that checks are on the way out and the use of cash is declining in Australia, as everywhere else. Highlighting the growing use of digital wallets, Frydenberg noted that “digital currencies are fast becoming the new normal – and our regulatory system has not stayed up to date.”

Without these changes, he added, “Australian businesses and consumers could increasingly transact in environments that are largely unregulated from an Australian perspective. “

Not only would this put them at a competitive disadvantage, but Frydenberg also said that “all the rules at stake” for the country’s crypto industry would “instead be determined by foreign governments and large multinationals, including including tech giants “.

However, nothing is expected to be enacted until federal elections slated for May 2022, according to the opposition shadow treasurer.

Centralize

Frydenberg also said the government “will work with the reserve bank to study the feasibility of introducing a central bank digital currency” – something that would be a “world class initiative”.

Central bank digital currencies, or CBDCs, are government-issued forms of national fiat currency that are said to be legal tender, just like paper money.

See Also: To Fight Crypto Competitors, More Central Banks Consider Digital Currencies

Likely blockchain-based, CBDCs are a big deal in the Asia-Pacific region as China is on the cusp of issuing a digital yuan, which puts it way ahead of any major economy in the world. The extensively tested CBDC is expected to go into circulation ahead of the Beijing Winter Olympics in February.

Read more: Central Bank of China: 10 million companies, 140 million people using the digital yuan

China’s digital yuan project has ignited a fire under governments around the world, with some concerns about its more efficient use across borders, increasing China’s economic and political clout.

One of them is the other giant in the Asia-Pacific region, India, which is seriously considering setting up its own CBDC, with a pilot project slated for early in 2022.

More details: India’s central bank plans digital currency trial in 2022

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