Australia to Push for A Cryptocurrency Framework to Promote Innovation and Investment

The Parliamentary committee chairman reviewing digital assets’ use says they don’t want to “put a new coat on an old hook,” and he is hopeful that crypto will “break the back” of de-banking.

Australia’s crypto industry needs a robust policy and regulatory framework to compete with other global financial hubs, said the Select Committee on Australia as a Technology and Financial Centre in a draft report on Wednesday.

The parliamentary committee that’s reviewing the use of digital assets said that such a framework is needed to promote investment, provide a structure for innovation to thrive while protecting consumers and facilitating market competition.

The report recommends establishing a market licensing regime for crypto exchanges that would cover capital adequacy and responsible person tests, a clear framework for custody of digital assets with minimum standards, new company rules covering new projects in DeFi, and conducting a token mapping exercise to determine the best way to characterize the different types of tokens in Australia.

As for DAOs, the report notes that they do not fall within any of Australia’s existing company structures, with legal liability for them still “unclear.” It pointed to standards in Wyoming, US, as a potential template.

These recommendations are “a big push to detail a cryptocurrency framework for Australia,” said Andrew Bragg, a senator from the conservative Liberal Party and chair of the committee, in an interview. This, according to him, would allow them to compete with the U.K. and Singapore.

“What we don’t want to do is put a new coat on an old hook.”

“There’s a strong anti-competitive element in Australia where the incumbents don’t like innovation and their solution is to push new ideas into old regulatory frameworks that were designed for something else.”

Bragg also hopes that crypto will “break the back” of de-banking — a practice in which lenders close the account of clients they consider high risk. De-banking “is killing too many small Australian businesses — and we simply can’t afford that to happen,” he said.

A study last month found that over a third of all Australians under 50 either own or have owned crypto assets.

The former regulator further said that he wants these recommendations to be adopted as policy in the coming months to be legislated after the federal election early next year.

“We want to be a world-leading jurisdiction for cryptocurrency,” he told the Financial Times.