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Digital assets could add $40B a year to Aussie GDP: Tech Council report

A clear principles-based regulatory approach to the digital assets sector could be a huge benefit to the Australian economy according to the report.

Up to $40 billion a year (AU$60 billion), could be added to Australia's national GDP with the right regulatory framework and could lead to enormous cost savings for consumers and businesses according to a new report.

The Nov. 29 Digital assets in Australia report was commissioned by the Tech Council of Australia (TCA), one of the country's technology industry advocacy groups, and written by technology consulting firm Accenture, which outlined a number of potential benefits the growth of the digital assets sector in Australia could deliver, stating:

“Digital assets (DA) have the potential to transform our lives offering significant time and cost savings to individuals and businesses”

The report estimates digital assets — such as cryptocurrencies, stablecoins, tokens, and Central Bank Digital Currencies (CBDCs) — could deliver an “80% reduction in retail payments costs by 2030,” save Australian businesses 200 million hours per year by automating tax compliance and administration, and a further 400,000 hours in preparing documents for business loans.

Potential economic and social benefits of the digital assets sector in Australian dollars. Source: Digital assets in Australia 2022 report.

It also points to potential savings for consumers of almost $2.7 billion per year (AU$4 billion), or $107 (AU$160) per person, if they use digital assets for international transactions while suggesting that an instant settlement of business transactions could be hugely beneficial for the 4,000 businesses that fail each year due to cash flow issues.

Decentralized Autonomous Organizations (DAOs) are referred to in the report as a way to build public trust by making decisions, transactions, and procedures “automated and transparent,” with all members of the organization granted equal rights through the issuance of utility tokens.

It also mentions that to fully unlock the potential of DAOs, the government needs to clarify the legal status of DAOs including the liability implications for its members after participants of the Ooki DAO were charged by American regulators.

The report estimates “up to 100% of payments” could be facilitated by digital assets if a retail CBDC is introduced, pointing to the rapid uptake of retail CBDCs in other countries such as the e-krona in Sweden.

On Sept. 26, the Reserve Bank of Australia (RBA) — Australia’s central bank — released a whitepaper detailing the minting and issuance of an Australian CBDC, called the eAUD, which would be issued as a liability to the RBA. The pilot project is set to commence in 2023.

Related: Bitcoin is the king of crypto brand awareness for Aussies: Report

The report aims to help the government regulate the sector in a way that enables innovation while protecting consumers, and follows a promise from a spokesperson of Australian Treasurer Jim Chalmers — prompted by the downfall of FTX — that regulations would be coming in 2023 which aim to protect investors while still promoting innovation.

According to a Nov. 14 report from the Australian Financial Review (AFR), 30,000 Australian investors and 132 companies have funds locked up with FTX.

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Rushing ‘token mapping’ could hurt Aussie crypto space — Finder founder

Australian crypto entrepreneur Fred Schebesta said Australia already has a “fledgling” crypto industry but needs to “align with the other major markets."

Australian crypto entrepreneur and investor Fred Schebesta has described the Australian government's prioritization of token mapping as “wonderful,” but warns that rushing it could lead to detrimental effects on the economy.

Schebesta's comments come after Australian Treasurer Jim Chalmers released a statement on Aug. 22 stating that the “treasury will prioritize token mapping work" in 2022 to show how “crypto assets and related services should be regulated.”

Speaking to Cointelegraph, Schebesta believes Australia already has a “fledgling” crypto industry but needs to “align with the other major markets and their regulations.”

Schebesta added that the "intricacies” of token mapping are not clear, and "things are changing as well."

Schebesta is an Australian entrepreneur and investor — best known as the co-founder of Finder, an Australian comparison website. Schebesta is also a co-founder of crypto investment fund Hive Empire Capital and an advisor for Balthazar, an NFT gaming platform.

He explained that if “we rush” — the token mapping exercise could turn away crypto companies, particularly if there's a “very different approach” to other countries.

Schebesta stressed that it's not the time to "rush it out,” but take the time “to just take it easy and really, really do some deeper analysis.”

The token-mapping announcement from Australia's new Labor government came three months after it came into power, breaking a long silence on how it would approach crypto regulation in the country.

At the time, Treasurer Chalmers said the government wanted to reign in on the “largely unregulated” crypto sector.

“As it stands, the crypto sector is largely unregulated, and we need to do some work to get the balance right so we can embrace new and innovative technologies," he said. 

Related: Australia’s new government finally signals its crypto regulation stance

While many in the industry lauded the announcement as an "important step" for the industry, some were disappointed that there the country was not "further along" the path to regulatory certainty. 

Australian lawyer Liam Hennessy, partner at Gadens told Cointelegraph that Australia has been at the "forefront of the crypto developments,” but worries that the country is "slowly falling behind the U.K. and U.S.” due to failure to create rules for those “in the crypto industry, in particular those in financial services.”

Hennessy believes that while token mapping is vital, it shouldn't be the primary focus for regulators. 

"It should be secondary to actually creating some tax rules and regulations around licensing that we can give to our businesses that really need to hear it so they can compete with our global competitors.”

He fears that Australia is falling into the trap of “thinking that a little bit of attention from the government will solve the problems,” which he believes that the token mapping exercise "to some extent, is being viewed as.”

Schebesta said he spoke at a senate hearing in 2021 where he highlighted “Australia would have a huge influx of new businesses [...] because it's a safe, stable, and great regulatory place to build their business,” adding that “tens of thousands” of jobs would be created “in the next two to three years.”

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Australia to Stocktake Crypto Holdings Ahead of Regulation

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Australia’s new government finally signals its crypto regulation stance

Australian Treasurer Jim Chalmers said that his government will improve the way Australia’s system manages crypto assets and provide greater protections for consumers.

Three months after being elected into power, the Australian Labor party has finally broken its silence on how it's planning to approach crypto regulation. 

Treasurer Jim Chalmers announced a “token mapping” exercise, which was one of the 12 recommendations in a senate inquiry report last year on “Australia as a Technology and Financial Center.” The report was warmly welcomed by the industry which has been anxiously waiting to see if the ALP government would embrace it.

Aimed at being conducted before the end of the year, the token mapping exercise is expected to help “identify how crypto assets and related services should be regulated” and inform future regulatory decisions.

Cointelegraph understands that Treasury will also undertake work on some of the other recommendations in the near future, including a licensing framework for crypto asset service providers dealing in non-financial product crypto assets, appropriate requirements to safeguard the consumer crypto asset custody, and a review of the decentralized autonomous organization (DAO) company-style structure.

In a statement from Treasurer Jim Chalmers, along with Assistant Treasurer and Minister for Financial Services Stephen Jones, and Assistant Minister for Competition, Charities and Treasury Dr. Andrew Leigh, the Albanese-led government says it wants to reign in on a “largely unregulated” crypto sector.

“As it stands, the crypto sector is largely unregulated, and we need to do some work to get the balance right so we can embrace new and innovative technologies

The statement noted that more than one million taxpayers have interacted with the crypto ecosystem since 2018, and yet, “regulation is struggling to keep pace and adapt with the crypto asset sector.”

The politicians claimed that the previous Liberal-led government had previously “dabbled” in crypto asset regulation through crypto secondary service providers “without first understanding what was being regulated.”

“The Albanese Government is taking a more serious approach to working out what is in the ecosystem and what risks need to be looked at first.”

Speaking to Cointelegraph, Michael Bacina, partner at Piper Alderman, said the token mapping exercise will be an “important step” to bridge the significant education gap within regulators and policymakers.

“Australia punches above its weight in blockchain right now but we have seen regulatory uncertainty lead to businesses leaving Australia,” he said.

Related: Australia’s world-leading crypto laws are at the crossroads: The inside story

“A sensible token mapping exercise which helps regulators and policy makers understand in depth the activities they are looking to regulate and how the technology interfaces with those activities should help regulation be fit for purpose and both support innovation and jobs in Australia while protecting consumers,” he added.

Caroline Bowler, CEO of BTC Markets said the move mirrors calls from many in the industry for "proportional, appropriate regulation" of the sector. 

"The additional benefits of token mapping are many. It will provide greater clarity to crypto investors; aid companies in developing their own blockchain-based innovations; provide guidance to digital currency exchanges; as well as assist regulators in shaping an appropriate regulatory regime," she said. 

However Dr. Aaron Lane, a senior lecturer at the RMIT Blockchain Innovation Hub, believes the token mapping exercise is something of a delaying tactic by the Labor government:

“Progress is progress — but it is disappointing that we are not further along the path to greater regulatory certainty for industry and greater protections for consumers.”

“Unfortunately, they’ve needed to buy themselves time with a token mapping exercise to allow them to get up to speed,” he added.

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Former US treasurer joins Ripple board

“Blockchain and crypto will underpin our future global financial systems," said the new board member.

Rosa Gumataotao Rios, the 43rd treasurer of the United States, will be joining Ripple’s board of directors. 

In an announcement from Ripple today, the company said Rios, who served as the U.S. treasurer from 2009 to 2016 under President Barack Obama, will be the newest member of the firm’s leadership team. Ripple CEO Brad Garlinghouse cited Rios’ experience in both the public and private sectors as well as her success in “rapidly accelerating businesses” in the company’s decision to bring her on board.

“Ripple is one of the best examples of how to use cryptocurrency in a substantive and legitimate role to facilitate payments globally,” said Rios. “Blockchain and crypto will underpin our future global financial systems.”

Rios’ name seems more closely associated with fiat than crypto, quite literally — all U.S. banknotes printed during her time as treasurer bear her signature. Her appointment follows Yoshitaka Kitao, CEO of Japanese financial giant SBI Group, leaving the board after two years and being replaced by SBI Ripple Asia CEO Adam Traidman.

Ripple also announced Kristina Campbell, formerly with payments platform PayNearMe at fintech company GreenDot, will be joining the firm as chief financial officer to “accelerate growth and deliver value to shareholders.” Campbell said she aimed to use crypto and blockchain technology to “make the global financial system accessible to all.”

The new leadership follows the XRP cryptocurrency losing its position as the fourth-largest cryptocurrency by market capitalization to Dogecoin (DOGE) for the first time. XRP only regained the number-four slot in April following rallies from Polkadot’s DOT and Binance Coin (BNB) as well as volatility in the token price.

XRP’s volatility has been attributed to charges brought by the U.S. Securities and Exchange Commission against Ripple, the firm’s co-founder Chris Larsen, and Garlinghouse in December 2020. The SEC accuses Ripple of conducting an "unregistered, ongoing digital asset securities offering" through its XRP sales. Though the allegations initially prompted many crypto exchanges to delist or suspend the trading of XRP, some have since relisted the token following a campaign from its supporters.

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