Regulate Crypto for Safety in Digital Transactions

Regulate Crypto for Safety in Digital Transactions

Australia is set to establish a comprehensive regulatory framework for cryptocurrency exchanges. Additionally, the country is evaluating the possibility of launching a retail central bank digital currency (CBDC). This move is part of the largest overhaul of the country’s payment industry in recent history. Regulate crypto for safety, ensuring a secure and well-regulated environment for digital assets.

Expanding Payments Regulations

The Australian government will also expand its payments regulations to cover online transaction providers, such as Alphabet Inc. and Apple Inc.’s Go, as well as buy now pay later (BNPL) services like Afterpay Ltd. These measures aim to prevent these providers from operating without direct oversight.

Josh Frydenberg, Australia’s Treasurer, emphasized that without reforming the current regulatory framework, the future of the country’s payment system could fall under the control of Silicon Valley. He affirmed that the Australian government must maintain sovereignty over its payment system.

Australia’s Global Leadership on Crypto Regulation

The Australian government is positioning itself as a global leader in regulating cryptocurrency, taking a more comprehensive approach compared to countries like China and India. This comes as a response to the growing role of digital currencies in the financial system.

The use of non-cash payments and cryptocurrency in Australia has skyrocketed, particularly during the pandemic, as people spent more time online looking for investment opportunities. According to government data, about 55 million non-cash transactions occur daily in the country. A significant portion of these transactions is conducted via mobile devices. Additionally, the number of Australians transacting with digital coins has increased by 63% this year alone. Regulate crypto for safety to ensure secure and trustworthy digital transactions in the growing market.

Consultation on Licensing Digital Exchanges

Frydenberg announced that the Australian government would begin consultations in early 2022 to create a licensing framework for digital exchanges. This framework would allow clients to buy and sell digital assets in a regulated environment.

Regulating Firms Holding Digital Assets

The government will also review the legislation of firms that hold digital assets on behalf of clients. The feasibility of a central bank digital currency will also be explored as part of these efforts to improve financial services.

Jack Dorsey, a spokesperson for Afterpay and head of Square Inc., expressed his support for crypto regulation. He emphasized that he supports any procedure that will fairly evaluate the benefits of innovation for competition and consumers.

Mixed Reactions from Big Tech

Apple has declined to comment on the new stance taken by the Australian government regarding crypto assets. Google, meanwhile, has refrained from providing an immediate response.

Gerard Brody, the Managing Director of the Consumer Action Law Center, highlighted that regulating crypto exchanges is crucial as they now manage a significant amount of investors’ funds. Brody believes that proper regulation would help mitigate the financial risks and debt associated with crypto assets.

Global Movements in Crypto Regulation

Chloe White, the former federal government cryptocurrency adviser and CEO of Genesis Block, praised the Australian government’s move as timely and sensible. White believes that industry participants will be eager to engage and work through the details of the regulatory framework.

Australia’s approach to crypto regulation aligns with the perspectives of U.S. regulators, who aim to develop a framework that would make it easier for banks to offer digital asset ownership to their clients. However, in the UK, legislators are focusing on more sovereignty to monitor online promotions of digital assets, aiming to combat inappropriate content. In contrast, India is taking a stricter approach similar to China, proposing laws that could allow for the arrest of individuals using crypto without a warrant.

Conclusion: Investor-Oriented Regulation

We believe crypto regulation is essential to protect individuals from fraud and scams. However, overly strict regulations could stifle innovation and limit opportunities for citizens to benefit from the crypto market. That’s why we support the Australian government’s investor-oriented approach. It strikes a balance between safeguarding investors and fostering a safer, more robust crypto ecosystem.

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