The Australian government is prepping with plans to extensively reform the crypto industry within the nation’s borders.
The forthcoming regulations contain new tax measures as well as guidelines for the operations of crypto brokers and exchange platforms. They will also be used to help bolster the safety of investor funds.
According to treasurer Josh Frydenberg, imposing strict taxes on crypto transactions within the country is a necessary move. Frydenberg stated that Australia’s crypto sector is rapidly expanding; more residents are adopting virtual assets and their underlying technologies. To keep up with the transition, well-structured taxation and regulatory systems are vital.
Later today, the government will release the pertinent documents. One of the files consults with the crypto space about the licensing or rules regarding the custody of virtual goods. Additionally, this has connections to the treasury’s currently vague plans to compel exchanges to keep Australian funds within its borders.
Furthermore, by licensing crypto service providers the government aims to assure Australians that approved businesses are reliable. The volatility of cryptocurrencies is wholly unavoidable, and the government cannot safeguard Australian users from these effects. As a result, it hopes to create trust between suppliers and customers and through this, help the industry expand.
Users can remain confident that government-approved exchanges will not fail in their duties. The “Australian-made badge of approval” on these businesses will serve as proof of that.
This will be a uniquely Australian stamp of quality. The healthy heart tick of approval for your crypto exchanges.” says Jane Hume, Minister for Digital Economy.
Taxation Critical to Large-scale Crypto Adoption
Australian Senator, Andrew Bragg spoke regarding a structure for taxation. The senator recommends that the government set up a “Digital Services Act”. According to him, this is key in ensuring the nation’s goal to become a “crypto hub” remains feasible.
Bragg’s proposed act has four fundamentals, firstly technological neutrality. This is followed by extensive yet flexible rules on unprescribed code. He called for administration by ministers rather than rigid institutions and lastly unity, resourcing, and manpower within the government.
The lawmaker noted that the act would need to be well-defined and easy to understand. This would indicate Australia’s willingness to accommodate the crypto space on the level he envisions. Bragg, like treasurer Josh Frydenberg, also emphasized the importance of proper tax regulation.
He stated that the tax system requires an overhaul without which Australia cannot achieve its ambition:
You can have the best regulation in the world, but if you are not tax competitive then it is not going to work.”
Frydenbeg shared earlier that he would be working closely with Bragg to enforce coming alterations. According to the treasurer, these are the biggest changes the nation has witnessed in its payment sector in 25 years. A large portion is based on suggestions contained within a Senate report from October last year.
For now, the government has asked the Board of Taxation to look into a fitting tax regime for crypto assets. This is occurring alongside consultation on licensing and custody. The taxation report will be due by the end of 2022. The government has also scheduled the industry overhaul for this same period.