In Brief:
- The Australian Government plans to enforce a new regulatory framework on crypto.
- The proposed legislation by Treasurer Frydenberg will also target “buy now, pay later” services.
- The treasurer stated the treasury would collaborate with the central bank on a CBDC.
The Australian government is attempting to bring cryptocurrency “out of the shadows” by enforcing a new regulatory framework on crypto.
Treasurer Josh Frydenberg stated, “We’re taking this area out of the shadows and bringing it into a considered regulatory framework, which is world-leading.”
Speaking in an interview with 7News Australia, Josh Frydenberg stated that the government is “broadening out the definition of the services and products that can be regulated.”
In early 2022, the Australian government will begin consultations on developing a licensing framework for digital exchanges, as well as firms that retain cryptocurrency on behalf of their consumers.
“We want those businesses that are buying and selling cryptocurrencies to be properly licensed to provide greater certainty and security to those people who are transacting in that area,” Frydenberg added.
According to Frydenberg, the treasury would collaborate with the central bank on a central bank digital currency. Right now more than 800,000 Australians possess various forms of crypto assets.
The proposed legislation by the treasurer will also target “buy now, pay later” services. According to him, Australia has over five million accounts for similar services.
Better regulation, according to the treasurer, would bring proper transparency to fees and provide a level playing field for new entrants coming into the crypto market.
The RBA said it has completed a project looking into the possibility of adopting distributed ledger technology to create a wholesale version of central bank digital currency, as opposed to the government’s proposed retail version.
The bank said it will continue its investigation but did not specify whether a wholesale currency would be launched.
Not only Australia but the United Kingdom is also planning to launch its own CBDC. In November, the UK Treasury and The Bank of England announced a consultation for the CBDC to study and understand its behavior and impact on the economy, which could be launched in 2022.
