Australia has joined the number of countries planning to regulate the cryptocurrency sector, with the government announcing plans for a significant overhaul of payment system reforms that will also target digital currencies.
The planned regulations will mainly focus on crypto taxation, investor protection, and regulation of digital banks and exchanges, News Australia reports.
According to the country’s minister for Financial Services, Jane Hume, the government aims to ensure all crypto players act in a regulatory ecosystem amid increased adoption of various assets.
“The government can’t guarantee your crypto any more than it can guarantee a painting or a share in a company, and nor should it. But we can make sure Australian exchanges, custodians and brokers work within a regulatory framework that is better, safer and more secure,” she said.
Australia’s intention to regulate crypto emerged in 2021 after Treasurer Josh Frydenberg hinted that the state had plans to announce new laws.
In line with the planned regulations, the government is set to unveil three critical documents that seek to reform the payment sector. One document aims to collect views from essential players on licensing digital assets alongside the custody.
Notably, one of the recommendations by the Treasury was to compel crypto exchanges to hold the assets of Australian investors onshore.
Furthermore, the document will also reveal the outcome of two investigations into the crypto sector that will contain the terms of reference. The investigation is by Australia’s competition and finance agencies.
Minimizing tax burden
On taxes, the Board of Taxation (BoT) is expected to 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.
The country’s lawmakers have been at the forefront pushing for crypto regulation led by Senator Andrew Bragg. Notably, the government is expected to consider some of the recommendations by Senator Bragg, whose parliamentary 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 has called on the government to consider hiring experts to craft crypto regulation within a dedicated unit.
Besides the reforms, the Treasury is working on designing a crypto market license alongside local custody requirements. The findings are expected to be released as early as May.
Besides Australia’s crypto regulation lacking clarity, the country has built a reputation as a digital currency-friendly jurisdiction hosting several related businesses.