Cryptocurrency Regulatory Initiatives Announced As Australia’s Treasurer Kicks Off Payments System Overhaul

The head of Australia’s Treasury Ministry, Josh Frydenberg, is promising comprehensive reforms in the payments and cryptocurrency sectors.

The Treasurer says that, in about six months, the Australian government expects to have completed consultations on a licensing or a regulatory framework for cryptocurrency exchanges and providers of cryptocurrency custody services.

“In relation to crypto, by mid-2022 the Government will have:

Completed consultation on the establishment of a licensing framework for Digital Currency Exchanges to provide greater confidence in the trading of crypto assets.

Finalized consultation on a custody or depository regime for businesses that hold crypto assets on behalf of consumers so that investors have greater confidence in the safekeeping of these assets.”

Frydenberg says that the Australian government is considering a central bank digital currency (CBDC) and expects to finalize the consultation process in about 12 months.

“The Government will commence consultation on the feasibility of a retail Central Bank Digital Currency in Australia, with advice to be provided by the end of 2022.”

By the close of 2022, the Australian government intends to have completed mapping existing crypto assets and studying Decentralized Autonomous Organizations (DAOs), according to the Treasurer.

“Importantly, by end-2022 the Government will have:

Undertaken a mapping exercise of existing cryptocurrencies and tokens to better inform consumers and others of the risks and benefits that arise.

Examined the potential of so-called Decentralized Autonomous Organizations (DAOs) and how they can be incorporated into Australia’s legal and financial regulatory frameworks.”

DAOs are entities with no central authority that operate under rules agreed upon collectively by the members and written in a smart contract.

The Australian Treasurer says that the reforms will encourage innovation in the payments and crypto sectors among other benefits.

“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.”

Over “800,000 Australians have transacted digital assets” over the past three years, according to Frydenberg.

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