Government officials in Australia plan to regulate cryptocurrencies as part of a broader revamp of the country’s payment system. Minister for the Digital Economy, Jane Hume, announced that the government will “enable Australians to invest safely and securely in crypto-assets”. This will be done by integrating a market license framework for cryptocurrency exchanges.
In addition to cryptocurrency taxation and investor protection from fraudsters, the legislation includes measures to regulate digital banks, cryptocurrency exchanges, and brokers. Hume explains that the new market license system gives the public assurance that they can trust the crypto services with which they engage. Australian crypto enterprises will be verified via an “Australian-made badge of approval.” The revised framework is expected to be released Monday afternoon as part of a policy paper.
Revamping The Australian Payment System
In a December whitepaper, Australian Treasurer Josh Frydenberg emphasized the coming regulatory reforms. It said the Morrison administration intends to make major improvements to Australia’s payment systems within the next 25 years.
Frydenberg stated: “If we do not reform the current guidelines, it will be Silicon Valley that determines the fate of our payment system. Australia must retain sovereignty over our payment infrastructure.” Additionally, legislation is being enacted by the federal government that establishes custody agreements for cryptocurrency exchanges.
“We have a strategy in place to ensure that crypto investors who store their funds on an exchange can always access them by instituting custody standards for crypto assets,” Hume explained.
Establishing Trust Between Investors And Exchanges
Hume says the government’s role in fostering the growth of the country’s crypto-economy is to establish “trust” between crypto investors and exchanges.
The Commonwealth Bank of Australia was the first institution to indicate its intention to enter the cryptocurrency market. In November, the bank said it would offer users the possibility to buy, sell, and store crypto assets through its mobile app, Commbank. This functionality is currently being tested in a pilot program.
The bank’s decision to offer cryptocurrency services stems from its clients’ growing use of cryptocurrencies, according to Sophie Gilder, director of blockchain and digital assets at CBA. Gilder emphasized: “At the time of this writing, about 700,000 of our customers are actively transferring money to cryptocurrency exchanges, indicating that they are already active in this field. Our customers are already there, whether we’re there or not.”
According to Frydenberg, Australia’s regulatory infrastructure requires adaptation, with a stronger strategic lead from the government. He stated: “The government’s comprehensive payment and crypto-asset reforms will cement Australia’s position as one of the world’s leading countries.”