Australian Senate Committee Suggests 12 Recommendations for Cryptocurrency
Cryptocurrencies are arguably the biggest revelation of the 21st century. This new type of digital asset and currency has gained wide popularity among retail and large-scale investors because of the numerous advantages over traditional asset types.
However, despite its multiple benefits, cryptocurrency tokens or assets are also known for their unpredictable price movement, volatility, environmental damage, and role in illegal or fraudulent activities.
As a result of this drawback to cryptocurrency tokens, many countries such as China, Turkey, and Vietnam restricted using these tokens within their borders. They cited the unpredictable nature of cryptocurrency as why they would prefer their citizens stay away from it. Australia used to be a leading country in its stance against crypto coins. But it seems like that stance is softening.
There are now discussions of cryptocurrency adoption within the borders of the country. Recently, the Commonwealth Bank (CBA) had expressed the desire to allow its customers and users of the CommBank app to trade cryptocurrency. This is the first time any of Australia’s big banks has taken a step to support cryptocurrency.
According to a survey by the bank, a good chunk of its customers already trades crypto coins and tokens. The management at CBA believes that they can play a role in introducing these coins into the country. They have committed to creating a secure and reliable platform to facilitate easy and swift exchange between users.
Also, The Commonwealth Bank will begin its cryptocurrency adoption by inviting 2,000 customers to participate in its pilot phase. They will trade, swap, and hold cryptocurrency via the bank’s mobile app. The bank will also start its crypto offering with 10 of the most popular coins, including Bitcoin. However, users are not allowed to transfer cryptocurrency tokens to another person. This is because cryptocurrency transfers are untraceable and are used by fraudsters quite frequently. Therefore, the no-transfer rule is per counter-terrorism and anti-money laundering laws.
The Aussie committee has created new rules surrounding crypto to make the country more crypto-competitive
As a part of the increased adoption of cryptocurrency within the country, an Australian senate committee has set up new rules and guidelines that will control the adoption of these digital assets within the country’s borders. The committee was set up to support Australia’s goals to become a Technology and Financial Centre. They created an initial report in November 2020 but have finally provided recommendations on how Australia will adopt cryptocurrency.
The recommendations submitted by this committee identified the potential problems that may arise due to cryptocurrency adoption. However, they also included 12 possible solutions to these issues. These 12 new rules will serve as the foundation for crypto regulation in Australia. In the past, it has not been easy to create laws that will regulate this new digital asset and technology.
While there’s still some fine-tuning left to do, the groundwork is in place for these recommendations to become law shortly. The committee proposed that all crypto exchanges get licensed and created new rules on setting up a depository for this digital asset. It also recommended the release of regulations to guide companies that have adopted the decentralized autonomous organization (DAO) structure. These recommendations have been passed to the Senate, which may be finalized.
The Australian Senate Committee Suggests 12 New Crypto Recommendations
It’s no longer news that the Australian Senate Committee has spent a long time reviewing the cryptocurrency situation around the world. And they have come up with a set of 12 recommendations to regulate crypto-related activities within the country’s borders. This committee looks to guide citizens to safely use these digital assets and create a clear framework for the domestic crypto-assets sector. According to initial indicators, these recommendations will address any issues related to blockchain technology and crypto-assets within the country.
The objective of this platform is to make Australia a leader in digital assets. As a result, Australian citizens will access more digital assets at lesser prices when these new recommendations are implemented. Currently, Australia is one of a few countries worldwide pushing for cryptocurrency regulation to ensure more people have access to the benefits of the technology. In addition, it will let Australian residents control their financial decisions and other related issues.
Why the Crypto Senate is Pushing for New Laws to govern Cryptocurrency in Australia
According to the committee chairman, Senator Andrew Bragg, the recommendations were designed to protect Australian residents interested in cryptocurrency from fraudulent activities. The new regulations will also ensure that the country is not left behind as the whole world tries to leverage the benefit of these new digital assets.
There have been numerous commendations from different quarters on the committee’s report. Many experts and crypto enthusiasts have described the motive as forward-thinking and an essential step into a technologically-inclined future. They consider this step the best bet to avoid being left behind by other world powers in crypto adoption.
The 12 New Crypto Recommendations According to the Aussie Senate
The Senate committee closely reviewed ongoing issues in the cryptocurrency market. They have used this knowledge, coupled with recommendations from other parts of the world, to develop their unique regulations. These recommendations include:
- The committee suggested the government of Australia should create a market licensing system for Digital Currency Exchanges, which would include capital adequacy and auditing tests under the Treasury portfolio.
- The committee also recommended the establishment of a depository regime for digital assets governed by only the basic standards under the Treasury portfolio.
- Another recommendation was for the Australian Government to organize a token mapping exercise to figure out how best to catalogue the country’s numerous types of digital assets. This exercise would also feature input from related regulators and experts.
- The Australian Senate also advised that the Australian Government create a new corporate structure on Decentralized Autonomous Organization.
- Next, the Senate also recommends that there should be clarifications on the regulations guiding Anti-Money Laundering and Counter-Terrorism Financing to ensure that the laws are relevant and do not restrict innovation.
- Another recommendation by the Australian senate was that there should be amendments to the Capital Gains Tax (or CGT) system such that transactions involving digital assets only cause a CGT event during instances of genuine and definable capital loss or gain.
Click here to see the full list of the recommendations of the Australian Senate.