Since the inception of cryptocurrencies, there have been talks of making the system secure and reliable for investors and consumers alike. However, several practices from crypto sellers and buyers have forced the administrations to take stricter measures, and Australia is one classic example.
In recent developments, the Australian government announced a major revamp in the regulations for cryptocurrency in Australia to make its payment systems more secure and enhance the services related to cryptocurrencies.
According to the treasurer Josh Frydenberg, these regulations will be the most significant reforms in Australia’s payment systems in the last 25 years.
So, as a crypto investor or an enthusiast of this field, what do you need to know about these regulations? Here are some critical things to know.
Modernising the Payment Systems
With the boom in blockchain technology and world governments quickly shifting to digital payment platforms, Australia aims to modernize its payment systems. So, the new regulations will attempt to broaden the scope and better define the products and services related to digital payments.
The attempt will bring cryptocurrencies into the limelight, with apparent ambiguities about digital assets, as the country aims to provide a world-leading framework for managing crypto payments.
The government released a new strategy via a pdf document mentioning cryptocurrency reforms. These reforms will place Australia in the leading position among the world countries for cryptocurrency management.
Obligatory Licensing for Firms Dealing in Crypto
The regulations will bind the Australia crypto market to acquire licenses. So, all firms dealing with cryptocurrency in Australia will be safer and more secure for the buyers and the sellers.
Moreover, next year, there is a regulation for licensing plans for the cryptocurrency exchange in Australia. The licensing measures will create more robust protections, and the investors will be obliged to follow the rules and guidelines to complete their transactions.
The licensing framework should be up for discussion by the mid of 2022. It will focus on digital currency exchanges to create a more viable environment for crypto investors.
The discussion will follow a consultation on the matter by the administration, making easier ways for crypto and crypto-assets.
Cryptocurrency Mapping to Start by the End of 2022
Cryptocurrency in Australia will also undergo an examination and mapping. This exercise will give consumers a better understanding of the country’s existing crypto assets and tokens.
As a result, the government can launch initiatives to better inform the stakeholders about the risks and benefits of crypto investments at certain times in Australia.
Establishment of a Central Bank to Promote Digital Currency
Another critical part of this examination is to address the Decentralized Autonomous Organizations operating in Australia. The idea is to bring such bodies under the legal frameworks. That way, the government can control and regulate these bodies for further financial initiatives.
It also aims to understand the possibility of cryptocurrency use in retail central banking digital currency (CBDC) in Australia. It’s an attempt to launch a digital currency equivalent to the cash accessible for all Australians.
Even though the official statement from the Reserve Bank of Australia suggested that the CBDC may not be an urgent initiative, it’s interesting that the central bank is putting efforts to speed up the digitization process.
The primary aim to fast-track the process is to stay ahead of the global competitors in implementing measures for cryptocurrency in Australia.
DAOs will be Soon Regulated
The new regulations will also acknowledge the role of DAOs, indicating that they are the key players in helping the crypto market in Australia. The government believes that the DAOs deserve recognition, so that it will open consultation services in the second half of this year.
Crackdown on BNPL Crypto Deals
The regulations specifically target the buy now pay later (BNPL) apps. The rules will affect more than 800,000 Australian investors who own some cryptocurrencies. Regulating the BNPL apps is perhaps the biggest shakeup in the Australia crypto market.
In his address about the revamp in regulations, Josh Frydenberg stated that more than five million accounts run on buy now pay later services. So, it’s critical to bring such accounts under the law.
Moreover, according to the reports, the treasury will start a licensing system to regulate the financial technology sector.
Given an increase of 63% in crypto transactions in the last year, the regulations will ensure more transparency and promise more economical accountability for digital transactions.
De-banking Crypto Businesses
While the regulations for licensing will be under consideration, the authorities will also look for the feasibility of businesses that invest in crypto assets for their consumers. These investments ensure great confidence from the consumers.
Moreover, it aims to look at the de-banking issues more closely in this duration. Generally, banks refuse to serve businesses with crypto investments citing higher risk.
De-banking seems to be a significant problem with crypto businesses. Business owners complain of being debunked several times. But, more importantly, these are some of the bigger names in the Australian banking sector.
The worst part about debanking is that the banks don’t explain the reasons for declining funding with much clarity. As a result, it is more complicated for the owners to retain their banking services.
Business owners complained that they don’t discuss the matter in detail, which creates more significant problems running some basic business operations.
Therefore, the plan to regulate the debanking issues will give business owners much-needed relief.
The recent developments in the Australian crypto market will place it among the leaders of cryptocurrency in the world. As the government plans to provide more security to crypto investors, the new regulations can prove to be highly impactful in the long term if things go to plan.