The Australian government is making strides in reforming consumer and business payments as well as building a framework for the regulation of the crypto market as innovations in payment technology rapidly increase.
The Rise of New Payment Technology
Australia has long been working on the possible implementation of a Central Bank Digital Currency (CBDC), and a year-long study by the Reserve Bank of Australia (RBA) has determined that a CBDC could be used by the wholesale market for the funding, settlement and repayment of a tokenised syndicated loan on Ethereum-based distributed ledger technology (DLT). Research will continue accordingly.
The report comes as the Australian government is in the process of overhauling its regulatory framework for payment systems for the first time in more than 20 years. The concern with emerging payment technologies – such as those provided by Ant Group Co or even Tether – is that a digital currency pegged to the US dollar could pose a threat to monetary regimes and add a new layer to cross-border payments.
If we do not reform the current framework, it will be Silicon Valley that determines the future of our payments system […] These are significant shifts which we need to be in front of.
Josh Frydenberg, Australian Federal Treasurer
According to the Australian Taxation Office, more than 800,000 Australians have made transactions with digital assets since 2018. Since the technology is available and people are using it, the country has also opted to broaden its payment laws to cover online transaction providers such as Apple Inc and Alphabet Inc’s Google, as well as buy-now-pay-later (BNPL) providers like Afterpay Ltd. This would effectively end their run of operating without direct supervision.
Australia Leading Crypto Regulation
Leading up to the reform, in October an Australian Senate committee released a 12-point crypto reform plan to assist in the regulation of the growing digital asset ecosystem. Now full-scale crypto regulation is coming to Australia, and it includes licences for exchanges, laws for DAOs, action on de-banking and a review of tax settings.
The move to regulate digital assets is an important one with many factors to consider, but consultation and discussion are essential first steps with the support of key individuals in government positions.
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