Australian senator drafts bill aimed at stablecoin, digital yuan regulation

September 19, 2022 Coin Telegraph

Senator Andrew Bragg on Monday released a draft bill aimed at regulating crypto exchanges, stablecoins, and the digital yuan.

Australian Liberal Senator Andrew Bragg has released a new draft bill aimed at clamping down on digital asset exchanges, stablecoins, and China’s central bank digital currency, the e-Yuan.

In a statement on Sept. 18, Senator Bragg stated that “Australia must keep pace with the global race for regulation on digital assets” as “it is essential that the parliament drives law reform” on the matter.

The new draft bill, titled Digital Assets (Market Regulation) Bill 2022, calls for the introduction of licenses for digital asset exchanges, digital asset custody services, stablecoin issuers, as well as disclosure requirements for facilitators of the e-Yuan in Australia.

Australia must keep pace in the digital assets race: a bill to protect consumers, promote investment & protect our interests.

Media statement: https://t.co/VxFnAKnh1v
New Bill: https://t.co/rtMj2t9Ng2
— Senator Andrew Bragg (@ajamesbragg) September 18, 2022

Speaking to Cointelegraph, Senator Bragg said Australia has “quite a risk exposure, as an economy, and that’s one of the reasons why we need to have a serious program for managing disruption, managing risks, that emanate from the development of a CBDC.”

Senator Bragg said the objective of this particular act is to provide “an effective regulatory framework” as well as to provide "for the reporting of information by certain banks that facilitate the use or availability of digital Yuan in Australia” and to provide “additional duties” for governing bodies in relation to this act and the “regulation of activities relating to digital assets and digital Yuan.”

Senator Bragg said that this isn’t “an accusatory position to take” it’s simply just being “prepared and gathering information” which he thinks is entirely “reasonable.”

The Liberal senator also added that Australia wouldn’t benefit from having a CBDC as “privacy issues cannot be managed,” however it is important that the Australian government “put something on the table” to manage other CBDCs being introduced, as the Governor of The Reserve Bank of Australia has “spoken before saying there needs to be regulation on stablecoins.”

The draft bill consultation is open until Oct. 31, 2022 and welcomes “community feedback.”

Andrew Bragg , a pro-crypto Australian politician, has been an outspoken advocate for cryptocurrency since he was elected senator in 2019. Senator Bragg has been pushing for a clear regulatory framework for digital assets and crypto companies since 2021, in an effort to prevent local startups from moving overseas.

Senator Bragg noted that he “chaired the committee” for digital assets with “no fixed view at the time” and “conducted an inquiry into these matters” as well as informing himself “about the risks and opportunities.”

Meanwhile, the Australian Labor government is said to be working on “crypto asset reforms” to “improve the way Australia’s regulatory system manages crypto assets."

Last month, the treasury stated it will “prioritize token mapping work in 2022, which will help identify how crypto assets and related services should be regulated.”

Commonwealth Bank’s plans to expand crypto services to 6.5M delayed by red tape

April 7, 2022 Coin Telegraph

Andrew Bragg

One of Australia’s biggest banks is still wading through a sea of red tape spun by local financial regulators before launching its crypto products to all of its retail users.

Financial regulators are standing in the way of expanded crypto services on Commonwealth Bank of Australia’s (CBA) mobile app. In an Australian first, the bank aims to grant all of its 6.5 million users access to cryptocurrency services.

The CBA’s crypto products started a pilot of the services late last year after which it hoped to open up to all of the users of its app, however it now appears to be moving toward a second pilot. The Australia Financial Review (AFR) reported on April 6 that the Australian Securities and Investment Commission (ASIC) has tied up the launch with red tape.

ASIC objects to the launch on the basis of consumer protections regarding the target market and product disclosures. CBA has been working with ASIC and several other regulatory bodies within the Australian government in order to launch the services.

Speaking at the Australian Financial Review Cryptocurrency Summit on April 6, ASIC commissioner Cathie Armour explained her commission’s recent focus on crypto despite arguments that it falls outside ASIC's purview. She said that although crypto assets are not necessarily financial products which the commission can regulate, it was concerned:

“Consumers may be investing in an environment where they are not afforded the same level of protection that applies to financial products and services.”

In fighting back against new guidelines from ASIC that prohibit much of the work financial influencers do, government Senator Andrew Bragg stated that ASIC’s application of rules for financial products cannot be applied to crypto assets because cryptocurrency is not a financial product under Australian law.

In her speech Armour commented on ASIC’s ability to truly regulate crypto assets “depends on whether they fit within the legal framework for financial products and services," which she says is "a matter for Parliament."

Armour added that she sees “real benefits of innovation being within our regulatory regime,” but cautioned that: “There are a bunch of rules there that you need to follow.”

“There are a bunch of rules there that you need to follow.”

The announcement of the CBA’s intention to launch crypto services created a buzz last November as it was the first of the country’s “big four” banks to do so. Blockchain Australia CEO Steve Vallas told Cointelegraph that the move would be “extraordinarily important.”

To make the product a reality, the CBA partnered with offshore crypto exchange Gemini and blockchain analysis firm Chainalysis. Once fully launched, the product will include Bitcoin (BTC), Ether (ETH), Bitcoin Cash (BCH), and Litecoin (LTC).

Australian Senator proposes landmark Digital Services Act

March 21, 2022 Coin Telegraph

Andrew Bragg

The new legislative package will address issues in crypto custody, taxation, and DAO operations in order to protect consumers against bad actors in the space.

Australian Liberal Senator Andrew Bragg opened the Australia Blockchain Week conference with a bombshell legislative proposal that he hopes will lay the groundwork for a new Digital Asset ecosystem down under.

The proposed Digital Services Act (DSA) legislative package calls for reforms in crypto market licensing, custody, decentralized autonomous organizations (DAOs), debanking, and taxes. Senator Bragg said in his address at the conference that he expects the legislation in the Act to “protect (crypto) consumers against malicious operators.”

Senator Bragg outlined the four main pillars that the DSA is guided by. He explained that the DSA would be technologically neutral, have broad and flexible principles, be regulated by a Minister rather than a bureaucratic agency, and use government resources and personnel. In his view, such guidance will help Australia show that the country is ready to take a greater role in the crypto industry.

“This will show Australia is open for business and things are clear and clean.”

The Senator also took on DAO’s, challenging various branches of the government to take them seriously. He went as far as calling them “an existential threat to the tax base” under current rules.

According to data published by the Parliament of Australia, the company tax accounts for the second-largest source of revenue for the government behind income tax, however, DAOs are not taxed as companies.

To that, Senator Bragg said that his country’s “reliance on company tax is unsustainable” if an increasing number of organizations become a DAO. As a result, the DSA would task the government with creating a framework for creating standards for DAOs without stifling their core principles.

The standards would essentially ensure consumers have access to audit, assurance, and disclosure services from DAOs that help them distinguish between retail and wholesale organizations. Senator Bragg called for the Treasury to address those issues while also “leaving the field open for DAOs to continue to live up to their name.”

Building on Australia’s crypto hub ambitions: address to @BlockchainAUS.https://t.co/j79BpbGJKI pic.twitter.com/8bf7Sqjut4
— Senator Andrew Bragg (@ajamesbragg) March 20, 2022

Head of corporate development at Australian crypto exchange Swyftx Michael Harris is in favor of the government instating higher standards for the domestic crypto industry. He told Cointelegraph today that exchanges have nothing to fear from higher standards because ”Most Australian exchanges already take their duty of care to customers very seriously.”

Harris added that the land down under should be leading the developed world in crypto regulation because of its high rate of adoption. A survey from pollster Finder found that 22.9% of Australians owned crypto from October to December 2021. Harris continued to state that:

“We see this as an important step forward. Australia has one of the largest crypto adoption rates in the developed world. It makes complete sense for us to lead on regulation.”

One of the major concerns in the crypto market lately is its use by individuals and nations to circumvent global economic sanctions. There is currently a debate raging in the US Senate about whether the Russian government is able to keep its military operation in Ukraine funded with the help of cryptocurrency.

Blockchain tracking firm Elliptic found on Mar. 15 that some sanctioned individuals are holding crypto, but Senator Bragg stated that the Aussie government was powerless under the current Digital Currency Exchange (DCE) laws to serve retribution on such offenders. The DCE’s lack of jurisdiction served as motivation for making the new proposals to prevent sanctioned individuals from taking advantage of lax crypto laws, adding:

“The reality is we don’t live in a libertarian nirvana. We cannot have regulatory arbitrage.”

Australian government gives nod to 6 world leading crypto reforms

December 8, 2021 Coin Telegraph

Andrew Bragg

“What is clear is that if we embrace these developments, Australia has an enormous opportunity to capitalize on the convergence between finance and technology,” Treasurer Josh Frydenberg said.

The Australian government is seriously consider the rollout of central bank digital currency (CBDC) and has backed numerous forward-looking regulatory crypto-proposals as part of a new “payments and crypto reform plan.”

Treasurer Josh Frydenberg says the reforms "will firmly place Australia among a handful of lead countries in the world."

The reform plan is said to be the biggest shake-up of the Australian payments system since the 1990s, with part of the crypto-related groundwork set by the innovative proposals put forward by an Australian Senate Committee in September.

According to the Australian Financial Review, the government is in favor of six out of nine reforms proposed by the Senate Committee, including a licensing regime for crypto exchanges, laws to govern decentralized autonomous organizations and a common access regime for new payments platforms.

Two proposals relating to tax and financial compliance have been referred to their respective government bodies for consideration, while the government has knocked back another proposal related to renewable energy Bitcoin mining tax discounts.

MD @ChloeWhiteAus quoted in the AFR on crypto regulation. The article includes a helpful summary table of the Government's response to recent crypto proposals, signalling the path forward on regulation in Australia See more: https://t.co/q9ZLuf4r4b pic.twitter.com/ZxmiwoDdjQ
— Genesis Block Advisory (@GenesisBlockAus) December 7, 2021

Treasurer and deputy leader of the Liberal Party Josh Frydenberg outlined the government’s plans for crypto regulation, taxation and CBDCs in a speech today at the Australia-Israel Chamber of Commerce (AICC).

“What is clear is that if we embrace these developments, Australia has an enormous opportunity to capitalize on the convergence between finance and technology,” he said.

Concerning CBDCs, an unnamed senior government source told The Australian on Dec. 7 that a retail scale “RBA [Reserve Bank of Australia] backed Bitcoin or cryptocurrency” is currently being considered, and will be a key element of the government's regulatory reform on digital payments.

During his AICC speech, Frydenberg spoke bullishly on the crypto asset reform:

“For businesses, these reforms will address the ambiguity that can exist about the regulatory and tax treatment of crypto assets and new payment methods. In doing so, it will drive even more consumer interest, facilitate even more new entrants and enable even more innovation to take place.”

“For consumers, these changes will establish a regulatory framework to underpin their growing use of crypto assets and clarify the treatment of new payment methods,” he added.

One Senate committee proposal the government looks set to ignore is the 10% tax discount for Bitcoin (BTC) miners who use renewable energy. Michael Harris the head of corporate development at local exchange Swyftx, told Cointelegraph:

“We think this was a political consideration. The reality is that it’s probably going to be difficult for any government to segregate out an industry like BTC mining from other energy consumers, however laudable the intention.”

However Harris said that overall the “noises coming out of government at the moment are promising” as the government seems to have recognized the need to introduce consumer protection laws without stifling innovation.

“The devil will be in the detail though and we are especially keen to avoid a system that reduces customer choice by stacking the decks in favor of big, traditional financial players.”

Crypto-friendly senator Andrew Bragg, who drove the recent crypto proposals, told Cointegraph in a statement that Frydenberg’s crypto and fintech reform plan will put “Australia on the tech map”:

“Australia will be a world-leading crypto hub under the Treasurer’s plan. Australian consumers will also benefit from new consumer protection rules.”

“The world is watching Australia which is now setting the global standard for crypto, payments and digital wallet reform,” he added.

Caroline Bowler, the CEO of local crypto exchange BTC markets welcomed the reforms, calling them a “major step forward to upgrade Australia’s one-size-fits-all regulatory framework in real-time.”

“It's great to see that the gaps in Australian regulation relating to digital financial products and the exchanges who support them are being finally addressed at the highest level of authority, and the Coalition Government is not shying away from the big issues surrounding crypto, payments and de-banking,” she said.

Proposed Australian exchange licensing could stifle competition: Kraken

November 23, 2021 Coin Telegraph

Adrian Przelozny

Kraken Australia’s Managing Director is concerned that a proposed new licensing regime for crypto exchanges could collapse the vibrancy of the industry down under.

With crypto regulation reportedly set to ramp up in Australia over the next 12 months, Kraken Australia’s Managing Director Jonathon Miller thinks that a strict crypto regime could stifle local competition.

The Senate Committee on Australia as a Technology and Financial Center, led by crypto-friendly Senator Andrew Bragg tabled 12 extensive recommendations for regulation of the digital asset and Fintech industry last month. The proposals included a new licensing regime for crypto exchanges, new laws to govern decentralized autonomous organizations (DAOs), and an overhaul of capital gains tax in decentralized finance (DeFi) to name a few.

In an exclusive interview with Cointelegraph, Miller said it was “yet to be seen” if the proposed regulations would have a positive or negative effect on the local sector moving forward, noting that:

“We've seen other markets where onerous regulatory regimes have come in and you know, you see a collapse of competition, a collapse of the vibrancy that we've got today in Australia.”

“And I hope that doesn't happen because that will be bad for the consumer in the long run,” he added.

Under the proposed market licenses for Australian digital currency exchanges (DCE), local firms would need to meet strict “capital adequacy, auditing, and responsible person” requirements to obtain a license to operate.

Speaking on the matter, Miller drew comparisons with Japan as he argued that the limited number of options on the market due to the government's strict licensing requirements which also negatively impact the local consumer.

“[Kraken has] a markets license in Japan, one of the very few crypto companies available to Japanese users. Even though we're active there and we're really supportive of that market, I don't think that's good for the Japanese people that there are so few opportunities for players in space,” he said.

Caroline Bowler, the CEO of local crypto exchange BTC Markets offered a different take, however, telling Cointelegraph that the incoming crypto regime in Australia will “enhance and enable innovation.”

“The proposal, I feel, had a lot of very forward-looking points of view in it. The talk about DAO’s in particular, that would be extremely innovative from a regulatory point of view for any country, any jurisdiction, anywhere in the world,” she said.

Bowler stated that the “single biggest roadblock” for the firm when exploring expansion opportunities for compliant services and products last year was the lack of crypto-focused regulation in Australia:

“That was causing issues across the business and issues for us to expand and issues for our clients and causing a hesitancy amongst people coming in. We couldn't offer the full range of what we wanted to offer.”

“And the licensing regime, as it currently existed for traditional markets, was a shoe that didn't fit. We couldn't squeeze in,” she added.

Adrian Przelozny, the CEO of Australian and Singapore-based crypto exchange Independent Reserve (IR) echoed similar sentiments to Bowler, noting that the “upside of regulation far outweighs any risks.”

IR became the first Australian crypto exchange to obtain a Major Payment Institution License in Singapore at the start of October. Przelozny suggested that the firm’s registration under the Monetary Authority of Singapore’s licensing regime has significantly improved the IR’s legitimacy in the eyes of its potential partners:

“I can tell you that being in a licensed jurisdiction is much better than being in an unlicensed jurisdiction. And this is because it really changes the conversations that we have with the partners that we get to work with.”

Przelozny highlighted that the “biggest challenge” for crypto firms in Australia is being able to secure good banking relations, with de-banking being a key issue in the local crypto climate. IR’s CEO stated that this may nolonger be an issue once local companies can acquire the appropriate licensing.

“Over in Singapore, as soon as we got the license, we found the banking conversations completely changed and now the banks are approaching us to be their customer,” he said.

Reserve Bank warns Aussies over punting on ‘fad driven’ cryptocurrencies

November 19, 2021 Coin Telegraph

Andrew Bragg

The Reserve Bank of Australia has warned local investors that the speculative frenzy on crypto could soon dry up if policymakers and regulators step in.

The Reserve Bank of Australia (RBA) has warned Aussie investors about speculating on digital assets as it casts doubt over the entire crypto sector.

During a Nov. 18 address to the Australian Corporate Treasury Association, the RBA’s head of payments policy Tony Richards offered an overview on distributed ledger tech, crypto assets, stablecoins, and central bank digital currencies (CBDCs).

In his speech, Richards raised questions over crypto’s validity and growth in 2021 as he took aim at the amount of capital invested into memecoins such as Dogecoin (DOGE) and Shiba Inu (SHIB):

“The recent boom in this area is perhaps best illustrated by the fact that Dogecoin, a cryptocurrency that was started as a joke in late 2013, had an implied market capitalization as high as US$88 billion in June this year.”

“And the Shiba Inu token, which appears to be equally free of any useful function, is currently the ninth-largest cryptocurrency, with a market capitalization of around US$26 billion,” he added.

Richards also asserted that public attention captured by crypto in 2021 was “no doubt fueled by influencers and celebrity tweets,” as he refuted the reported scope of how widespread crypto adoption really is in the country.

“Some surveys have claimed that around 20 percent of the Australian population hold cryptocurrencies, and one claimed that Dogecoin alone was held by 5 percent of Australians. I must say that I find these statistics somewhat implausible,” he said.

Richards outlined three scenarios in which the “current speculative demand could begin to reverse” in crypto that would essentially leave digital assets with minimal use cases in his opinion.

Firstly, he argued that investors may soon “be less influenced by fads” and FOMO and instead pay more attention to warnings of regulators and policymakers.

Secondly, he said that governments across the globe may aim to crack down on energy-intensive proof-of-work-based cryptocurrencies such as Bitcoin (BTC), and finally he said the tax authorities may aim to remove anonymity to clamp down on financial crime.

Commenting on Richards’ address, Steve Vallas the CEO of Blockchain Australia refuted the speculative-focused arguments against the entire sector, telling Cointelegraph that:

“Some regulators maintain an unhelpful and narrow focus on the speculative elements of the sector. That lens misses the remarkable infrastructure build that has occurred in recent years.”

A disappointing view in the face of a global opportunity to lead for Australia.

"RBA warns of ‘faddish’ crypto crash" https://t.co/9AIGlwmNoc via @eyersj @jessicasier
— Blockchain Australia (@BlockchainAUS) November 18, 2021

Crypto-friendly Senator Andrew Bragg, who is one of the key politicians behind the push to introduce robust crypto regulations in Australia echoed similar sentiments, noting that “the RBA is short-sighted on cryptocurrency. The utility and value to the economy of the technology is enormous.”

Afterpay ‘absolutely’ keen to explore crypto services after regulations clarified

September 9, 2021 Coin Telegraph

Afterpay

Afterpay spoke as part of the Senate inquiry into “Australia as a Technology and Financial Center” and Lee Hatton said there would be enough consumer demand to offer crypto services.

Australian buy now pay later (BNPL) giant Afterpay — now part of Jack Dorsey's Square — has said that it is likely to pursue cryptocurrency services once the regulatory framework is clear.

Following on from Afterpay’s submission to the Senate inquiry into “Australia as a Technology and Financial Center” which posited that merchants could slash payment costs by utilizing cryptocurrencies, representatives spoke to the inquiry on Sept. 8.

Afterpay’s vice president for public policy and communications Damian Kassabgi said that “this idea of being able to exchange currencies from person to person or to a merchant without going through the traditional rails could create a lot of efficiencies.”

Crypto-friendly Liberal senator Andrew Bragg asked if Afterpay had plans to offer crypto services in the future. Lee Hatton, the executive vice president at Afterpay responded that once the regulatory path was clear, the firm would be likely to meet the demand of crypto from its customers:

“Once we're able to understand the regulatory framework in this space, we can absolutely see where our customers are going. And it would seem to us that they are going to want to participate in this way.”

“We will absolutely see a part of our customers starting to leverage [Bitcoin] and we would absolutely be looking for a way to support them to do that,” she added.

The regulatory landscape of crypto in Australia remains unclear as the government is yet to put a detailed framework in place. Bragg urged the government back in May to “stay ahead of the game” by introducing regulations to protect consumers and foster innovation.

Relat Blockchain Australia says gov’t still dismissing industry as a ‘wild west’

The discussion moved on to stablecoins, with Kassabgi emphasizing the significance of using an Australian dollar (AUD) backed stablecoin for payments between consumers and merchants.

“It is not hard to imagine a world where a privately issued stablecoin that is pegged to the Australian dollar, one that passes from consumer-to-consumer or consumer-to-merchant with very little friction where the traditional payment rails are not used, where interchange fees are close to non-existent, and where there is no commercial bank as an intermediary,” he said.

“There are many benefits to this future outlook. However, there is work to be done to create a safe and efficient regulatory environment,” he added.

Australian crypto businesses tell Senate inquiry about being de-banked up to 91 times

September 9, 2021 Coin Telegraph

Andrew Bragg

Speaking on a panel as part of the senate inquiry into “Australia as a Technology and Financial Centre” three crypto firms outlined their de-banking experience in Australia.

Crypto-related companies and figures have provided evidence about being de-banked by Australian financial institutions to a Senate inquiry.

Crypto investment firm Aus Merchant, global remittance provider Nium and small peer-to-peer crypto brokerage platform Bitcoin Babe were speaking on a panel as part of the senate inquiry into “Australia as a Technology and Financial Centre” on Sept. 8.

All three are registered with financial intelligence regulator AUSTRAC and are subject to reporting requirements, however they all echoed similar sentiments of being de-banked without a concrete explanation as to why.

Michaela Juric, the founder of the peer-to-peer trading business dubbed after her nickname “Bitcoin Babe” stated that she has been banned by a total of 91 banks and financial institutions throughout her seven-year history in crypto:

“As of yesterday, I have been banned and de-banked from 91 banks and financial institutions. That's 91-lifetime bans. No reasons given, no case-by-case assessments or discussions engaged and no recourse available.”

At today's Senate hearings on crypto regulation, the session opens with @ausfintech providing testimony on #debanking: CEO says there is no area within fintech suffering more from this than the crypto sector, saying "Australia will be left behind"
— chloe white (@ChloeWhiteAus) September 7, 2021

Bitcoin Babe utilizes exchanges such as Local Bitcoins to conduct trades in Australia, and according to her profile on the website,she has conducted more than 40,000 trades since 2014 with a feedback score of 98%.

Despite holding a good reputation online, Juric told crypto-friendly Liberal Senator Andrew Bragg that some banks have even flagged her as a terrorist due to the nature of her business:

“I’ve had banks go as far as report me as being like a terrorist on some databases, and that’s what stopped me from being able to get some of these services.”

It’s troubling to hear about the personal impact of de-banking on people trying to set up a small business. The banks have said the driver of de-banking is the lack of a regulatory framework for digital assets. That’s what we must fix and we will hold the banks to that.
— Senator Andrew Bragg (@ajamesbragg) September 8, 2021

Singapore-headquartered Nium is licensed in 40 markets across the globe, however the firm stated that Australia is the only country where it has had issues with financial service providers.

Michael Minassian, Nium’s Asia-Pacific head of consumer business stated the firm feels that there are some “uncompetitive practices” that are being conducted with de-banking, as he questioned the “opaque” reasons that banks have offered when cutting services to the company:

“They're very vague as to why they are ceasing to provide banking services to you. I've had some bankers provide me with verbal reasons as the policy shifts within the bank etc, but essentially industries like remittance become too hard for the banks.”

“It's costly for them to try and establish frameworks that they can allow banking, so it's just easier for them to to to cease providing services,” he added.

Mitchell Travers —the co-founder of New South Wales-based crypto investment platform Aus Merchant — stated that with what little reasoning was provided behind debanking the platform, it was due to “risk avoidance” from banks.

“As far as I’m aware, It was a risk avoidance, risk-off attitude where the reasoning was that we were outside of the scope of services for these banks, and we weren't given an opportunity to provide enhanced due diligence procedures,” he said.

Senator Bragg responded by stating “okay, I see your registration with AUSTRAC is worthless to a bank, it sounds like.”

The Commonwealth Bank (CBA) provided a submission to the inquiry explaining its practices and stated that it operates “commensurate systems and controls to mitigate and manage” anti-money laundering and terror financing risk.

“In circumstances where a customer’s source of funds and source of wealth is unable to be determined, or their account activity is not in accordance with known business activities, the group takes appropriate steps to mitigate and manage its ML/TF risk,” The CBA said in its submission.

Senator warns lack of regulations could harm Australian crypto innovation

May 21, 2021 Coin Telegraph

Andrew Bragg

Australian senator Andrew Bragg has urged regulators to develop clear and comprehensive regulations to encourage innovation and ensure global competitiveness.

Conservative Australian senator, Andrew Bragg, has asserted that Australia must introduce better regulations for crypto assets if the country is to “stay ahead of the game” and foster innovation.

Appearing on Sky News, the member of the ruling Liberal Party — who is chairing a senate inquiry into Bitcoin and other digital assets — stressed that crypto asset products have already proliferated, emphasizing the need for Australia to cultivate a positive business climate and offer consumer protections for the burgeoning industry.

“The reality is these products are out there now, people are using them,” he said. “We need to make sure that we have the right policy and regulatory environment to be able to maintain our competitive advantage, but also to protect consumers.”

“People are using [digital assets] and we need to have a thorough review of it and see what sort of policy Australia wants to have if we want to be a tech and financial center.”

The senate inquiry into digital assets that Bragg is chairing was announced earlier this week. A paper compiled on May 19 indicates the committee will examine cryptocurrency policy in Australia with consideration of the regulatory approaches of the United States, Canada, the United Kingdom, and the EU.

The case for a regulatory framework. https://t.co/s6BpVgLviY
— Steve Vallas (@stevevallas) May 21, 2021

The paper warns that a failure to deliver comprehensive crypto regulations may drive investment offshore and undermine Australia’s competitive standing within the industry:

“The committee will be assessing options for the development of a comprehensive regulatory framework for cryptocurrency and digital assets. We want to know what type of policy provision and legal certainty is needed to drive private investment into Australian digital assets rather than the investment occurring offshore.”

The inquiry will look into the alleged practice of “de-banking” — where traditional banks suspend services to fintech firms who compete with legacy financial institutions. Bragg attributed the reported prevalence of de-banking to a “lack of sophistication in Australia relative to comparable markets.”

Bragg noted it is in the interests of the traditional financial system to repress the growth of the cryptocurrency and digital asset industries, stating:

“There is a strong vested interest in the banking and finance sector to keep the status quo in place where the banks and the public sector sort of, you know, run currency. And we need to interrogate that to make sure that that is the right thing for Australia, because when innovation happens, the solution is not to close the door on it.”

In response to questions regarding if Bitcoin’s price is vulnerable to manipulation, Bragg noted the committee’s intention to be “thoughtful and cautious,” but emphasized the prevalence of “unsavory” practices in the traditional markets.

“Everything is open to market manipulation,” he said. “There has been a lot of activity the banks have undertaken over the time as the custodians of the financial sector [...] which has been unsavory.”

Andrew Bragg

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