New Australian crypto legislation likely in 2022, Senator Bragg tells NFT Fest

October 1, 2021 Coin Telegraph

Talking about a digital asset plan being cooked up by a Senate inquiry, Senator Andrew Bragg said, “We will want the major parties, including my party, to adopt these policies as part of their election manifestos.”

Liberal Senator Andrew Bragg has told a local industry event that Australia’s digital asset plan to create cryptocurrency-related legislation is “coming” soon and could be enacted in 2022.

He also backed plans to run the sector on renewable energy as part of the government's yet-to- be-established goal of achieving ‘net zero’ carbon emissions.

Speaking at the virtual NFT Fest event supported by Blockchain Australia on Sept. 30, Bragg stated that the select Senate committee investigating the topic will publish its report by the end of October, which will include regulatory recommendations that can be legislated over the next 12 months.

“The review is due to conclude in about three weeks from now and the promise that I made you, I will keep. We will give you a plan, and that plan will be designed to put Australia at the front end of the digital asset society and the world,” he said.

Address to @BlockchainAUS @NFTFestAus - Australia’s digital asset plan is coming. https://t.co/xZVIKWGaZv
— Senator Andrew Bragg (@ajamesbragg) September 30, 2021

The crypto-friendly Senator hosted the Senate inquiry into “Australia as a Technology and Financial Centre,” in 2021, but emphasized yesterday that it is now time to put solid frameworks in place as opposed to prolonging the process with further reviews.

While there is still a lot of work to do, Bragg hopes the plan will be adopted no matter which political party is elected in the next federal election due 2022:

“I think that you deserve more than just a series of recommendations for new inquiries, task forces and further review. So we will be making some hard recommendations. [...] We will want the major parties, including my party, to adopt these policies as part of their election manifestos.”

While Bragg didn’t outline the specifics, he stated that the plan will include recommendations for a “robust policy framework” focused on three objectives: consumer protection, investor promotion and market competition.

“Now, for those of you that say we don't want to have regulation. I would remind you that your industry reps and the vast bulk of the industry is asking for some regulation, so there will be some regulation,” he said.

The Senator also stated that he is “very conscious” about not wanting to stifle innovation in crypto via regulation that suits the “incumbent vested interests” who want to see the sector “destroyed by a regulation that was designed for a whole different purpose.”

Speaking on environmental concerns over crypto’s energy consumption — as well as the government’s ambitions to transition to a “net-zero economy” — Bragg stated that he wants to see the crypto sector operate using solely renewable energy:

“I’ll just put the simple fact that we are trying to get to net zero. We want to get there as soon as we can. I personally think it's highly, and strongly in our economic interests to transition to a net-zero economy. And in the area of digital assets using a lot of electricity, we want that to happen on a renewable basis.”

“So I think it's a unique opportunity for the industry to pull this, pull those two things together,” he added.

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.

Afterpay tells Senate inquiry crypto could slash merchant payment costs

September 8, 2021 Coin Telegraph

Afterpay

Afterpay told the Australian Senate that using crypto could cut payments costs for merchants, and that the government should work to create a framework for an AUD-backed stablecoin.

Australian buy now pay later (BNPL) firm Afterpay believes that local merchants can slash payment costs by utilizing cryptocurrencies.

In a submission to the Senate inquiry into “Australia as a Technology and Financial Center”, Afterpay stated that the use of blockchain-based transactions would cut the fees associated with traditional payment methods including card issuer, network operator and banking fees:

“Merchants stand to benefit considerably from the cryptocurrency model, as card network fees are entirely removed from the equation and the customer/payer bears the transaction costs.”

Under the crypto model, the customer would front the cost of validating the payment on the blockchain. This could either be relatively cheap or costly depending on which cryptocurrency and blockchain the transaction is conducted with, or how congested a network is at any given time.

If such a scenario were to play out, Afterpay stated that transaction fees would be transparent and customers would be granted the choice to “wait for more favorable network conditions and a lower cost,” before making transactions.

The inquiry is investigating a broad range of factors related to financial tech, such as the economic and employment opportunities posed by crypto and blockchain tech, barriers to the uptake of new technologies, and the impact of corporate law “restraining new investment” in Australia. Afterpay will be speaking before the Senate committee later today (Sept. 8).

While BNPL competitors Zip have outlined plans to offer crypto trading services for its Australian and U.S.-based customers, Afterpay is yet to reveal any plans to work with digital assets. However, crypto-friendly payments firm Square acquired Afterpay in a $29 billion stock deal announced on Aug. 1, which could see the firm enter the space in the future.

In its submission to the senate, Afterpay noted that it "does not currently offer crypto-related products” but is actively “considering” how innovative fintech features could function as a part of the alternative financial platform.

Stablecoins down under

On the topic of stablecoins, Afterpay emphasized that the Australian government should work with the crypto sector to consider what “framework an optimal environment for an AUD-backed stablecoin should look like."

According to Afterpay, the objective should be to provide stablecoin users with protections concerning the asset but regulate it in a way that doesn’t stifle fintech innovation in Australia.

“This includes considering if regulatory instruments are required for stablecoin issuers to have transparent and adequate prudential reserve holdings, consumer-focused data protections and fair and appealable processes in place regarding account blacklisting,” it said.

Australian Senate

Stablecoins down under

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