The Australian government is considering implementing a central bank digital currency (CBDC) and has backed several proposals for cryptocurrency regulation as part of a new payments and cryptocurrency reform plan, which is also aimed at preserving the country’s sovereignty over its payments system.
Unlike some other countries that are taking measures to restrict cryptocurrency transactions, such as India and China, the Australian government gave the go-ahead to 6 cryptocurrency reforms that will put Australia on the tech map.
Australia’s plan to broaden its payment regulations aims to cover online transaction processors, such as Apple and Google as well as buy-now-pay-later providers. The target is to put an end to their unsupervised operations in the country.
The reform plan is the largest one in Australia since the 1990s, and some of the groundwork related to cryptocurrencies was laid by groundbreaking proposals put forward by an Australian Senate Committee in September. The government is in favor of six of the nine reforms proposed by the Senate Committee
A proposal related to tax breaks for renewable energy Bitcoin mining has been rejected and two proposals related to tax and financial compliance have been referred to their respective governing bodies for consideration.
However, the government seems to have recognized the need to introduce consumer protection laws, but without stifling innovation. These measures are even more necessary considering that the percentage of Australians who own or have owned cryptocurrencies has increased to 28.8%, up from 18.4% in 2020.
For businesses, these reforms will address the ambiguity that may exist over the regulatory and tax treatment of crypto assets and new payment methods. For consumers, they will establish a regulatory framework that supports their growing use of cryptocurrencies.
In 2022, the government will begin consultations on the establishment of a licensing framework for crypto exchanges and the regulation of platforms holding digital assets on behalf of clients.