Australian government proposes New crypto regulation including tax reform
Blockchain Week conference with a legislative proposal of Digital Services Act
(DSA) was opened by Australian Liberal Senator Andrew Bragg. This will lead to a call for reforms in crypto market licensing, custody, decentralized autonomous
organizations (DAOs), debanking, and taxes. This will include a new crypto
taxation system, additional protections for investors, and regulation for
crypto exchanges and brokers.
Regulating and building Australia’s growing involvement in the cryptocurrency sector-led federal government to consider new legislation. At the conference, Senator Bragg supported his address saying the legislation in the Act will protect crypto consumers from malicious operators. As per him, this will be the base work for a new Digital Asset ecosystem down under.
Consultation paper on “licensing and custody regime for digital assets” will be released by the government on Monday when it begins further consultation with the crypto industry. On Monday Australia’s Council of Financial Regulators will also be tasked to review the practice of major banks “de-banking” crypto businesses. In the first paper, the Treasury is seeking industry input on developing a licensing or custody regime for digital assets, while considering forcing crypto exchanges to hold Australian investments domestically. According to Senator Bragg, due to the result of legislation, Australia would become one of the few jurisdictions facing the issue head-on. As per the country’s minister for Financial Services, Jane Hume, the government focuses on ensuring all crypto players act in a regulatory ecosystem amid the increased adoption of various assets. By the end of the year, it will inform and implement a Board of Taxation review.
Several of these reforms are based on recommendations made in a Senate report on Australia's fintech industry that was released late last year.
As Senator Bragg explained, the DSA is guided by four main pillars. According to him, the DSA would be technologically neutral, follow broad and flexible principles, be governed by a minister rather than by an agency, and utilize government resources. His opinion is that such initiatives will help Australia demonstrate its readiness to take part in the crypto industry.
After Treasurer Josh Frydenberg hinted that the state had plans to announce new laws Australia’s intention to regulate crypto arise in 2021. Australian Treasurer Josh Frydenberg first announced these measures in December as part of broader reforms to the country’s payment sector, which he said were the most significant in 25 years.
CBW - External Analyst