Australia Releases Report With Suggestions Of Regulating Crypto Industry

• The Technology and Financial Centre, Senate Committee of Australia earlier revealed its suggestions on cryptocurrencies and the industry should be regulated.

• The report is a landmark report that showcases 12 suggestions for making a correct balance between innovation and legitimacy and highlights Australia’s effort to be at the forefront of the cryptocurrency industry.

• The suggestions include the introduction of new cryptocurrency-related regulations and licenses, introducing DAO, improving tax rules, and much more.

The Australian Senate Committee as a Technology and Financial Centre issued its brief suggestions on cryptocurrency regulation in October 2021. The final report’s 168 pages are broken down into 12 proposals directed at finding the correct balance between establishing legitimacy and inhibiting innovation. This is ground-breaking research that highlights Australia’s concerted attempts to position itself at the forefront of global crypto investment. Senator Andrew Bragg, the committee’s chair, feels that Australia can be a leader in digital assets and that it can be competitive with Singapore, the United Kingdom, and the United States.

First, a slew of new crypto-specific licenses and rules will be implemented. Regulators all around the world have been attempting to fit square pegs into round holes for far too long. This viewpoint ignores the underlying disparities that exist, as well as the power of digital assets to change the world. 

Customized Custodial Regime

– Advertisement –

This research recognizes the potential of bitcoin and advocates for a variety of specialized cryptocurrency licenses in Australia. It proposes a specialized market licensing framework for digital exchanges, as well as a customized custodial regime for digital assets. Details will need to be fleshed out, but if they get these frameworks right, it will give the sector the credibility it requires to enter the mainstream.

Second, Australian company law now recognizes a decentralized autonomous organization (DAO) entity type. This recommendation is significant because it demonstrates the Australian government’s willingness to embrace decentralized finance (DeFi) and crypto innovation. Wyoming is the only location I’ve heard of that has something similar in place, so Australia could be ahead of the game. 

If legalized, DAOS might provide a one-of-a-kind benefit that could propel the Australian economy towards a decentralized future a decade ahead. However, because modifications to the Corporations Act are notoriously rare in Australia, this will be the most difficult issue for the Committee to get approved. Senator Bragg, on the other hand, is the only one who can accomplish it.

Improved Tax Laws

Third, tax laws for crypto-to-crypto transactions have been improved. According to a recent Finder study, over 17% of Australians possess cryptocurrency, making it the world’s third-highest rate of adoption. However, this expanding group has had to deal with tax laws that are at best perplexing. Historically, the Australian Tax Office has viewed crypto-to-crypto transfers to constitute a capital gain. Only when there is a clearly discernible capital gain or loss, according to the new guideline, is the tax imposed. The devil will be in the details on this one once again, but active Australian crypto users may be the actual winners.

Fourth, additional tax incentives are being offered to promote green cryptocurrency mining. The Committee proposes a ten percent tax break for crypto mining companies that use renewable energy. This appears to be a wise decision to assist two rapidly growing Australian industries: renewable energy and bitcoin. This will be especially crucial as the Committee works to get these proposals approved against the backdrop of COP26 and growing climate change concerns.