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Australia Prepares For The Cryptocurrency Era
Regulators and banks brace themselves for a brave new crypto world, while Australians salivate.
* A series of major developments in the crypto sector signal a new chapter in Australian finance.
* Alongside a report out of the Australian Senate, CBA customers will be able to trade cryptos via a new app.
* ASX gains its first crypto-themed listing, the first of many.
Compiled by Ed Kennedy
2021 is likely to go down in history as the year cryptocurrencies gained credibility in Australia and throughout the world.
While crypto detractors and many supporters continue to have reservations about the crypto universe, even the most fervent critic cannot dispute that significant changes this year have instilled trust in the industry, which is expected to grow in size and support.
A examination of significant recent happenings in Australia starkly demonstrates this.
Those interested in understanding the Australian crypto industry must comprehend how these watershed moments will serve as the cornerstones of a new age in Australian finance.
A Snapshot of Australia's Cryptocurrency Adoption
Numerous statistics demonstrate that Australians have enthusiastically adopted cryptos.
According to the September publication of Finder's Cryptocurrency Report 2021, 17% of poll respondents said that they possessed cryptos as of June 2021.
Another poll conducted by Finder in January asserted that 25% of Australians either already owned or were planning to acquire cryptocurrency.
When a politician makes a reference to cryptocurrency, the industry takes notice.
While cryptocurrency is by definition decentralised, a centralised public authority's ability to significantly promote or hinder sector activities is contingent on its attitude.
The divergent experiences of crypto traders and professionals in the United States and China over the last several months – as addressed in further detail in An Idea With Currency: The American Quest For A New Crypto Accord and linked next – exemplify this.
While digital currency exchanges have been required to register with AUSTRAC since 2018, Australia's regulatory approach to cryptocurrency has been characterised as 'light touch' – until now.
Significant impetus for reform has developed in the aftermath of the Senate Select Committee on Australia as a Technology and Financial Centre's recent publication of its landmark final report.
It was released in October and includes 12 recommendations aimed at establishing Australia as a prominent crypto hub. Such reforms would take place in the licensing and regulation sectors, as well as in the taxation sector.
The report's first recommendation is for the Australian government to "...create a market licensing regime for Digital Currency Exchanges, including capital adequacy, auditing, and responsible-person tests under the Treasury ministry."
Recommendation 2 calls for the implementation of "a custody or depository regime for digital assets that meets the Treasury portfolio's minimal standards."
In terms of taxation, there are two noteworthy recommendations that, if followed, would have an immediate and noticeable impact on crypto traders and businesses alike.
According to recommendation 6, "the Capital Gains Tax (CGT) system should be changed to require that digital asset transactions generate a CGT event only when they result in a clearly identifiable capital gain or loss."
Recommendation 7 suggests "...that the Australian Government alter applicable legislation to provide a 10% corporation tax rebate to enterprises doing digital asset 'mining' and associated activities in Australia provided they use their own renewable energy to conduct these operations."
Other proposals in the study are certain to spark major debate, such as Recommendation 8's request for a policy evaluation of the possibilities for a central bank digital currency (CBDC).
Similarly, Recommendation 10's proposal "...that in order to increase certainty and transparency around de-banking, the Australian Government should develop a clear process for businesses that have been de-banked" and that it "should be anchored around the Australian Financial Complaints Authority, which services licensed entities," is especially significant given that de-banking is a source of anguish for a sizable portion of the local crypto scene.
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By Crypto PiratesRegulators and banks brace themselves for a brave new crypto world, while Australians salivate.
* A series of major developments in the crypto sector signal a new chapter in Australian finance.
* Alongside a report out of the Australian Senate, CBA customers will be able to trade cryptos via a new app.
* ASX gains its first crypto-themed listing, the first of many.
Compiled by Ed Kennedy
2021 is likely to go down in history as the year cryptocurrencies gained credibility in Australia and throughout the world.
While crypto detractors and many supporters continue to have reservations about the crypto universe, even the most fervent critic cannot dispute that significant changes this year have instilled trust in the industry, which is expected to grow in size and support.
A examination of significant recent happenings in Australia starkly demonstrates this.
Those interested in understanding the Australian crypto industry must comprehend how these watershed moments will serve as the cornerstones of a new age in Australian finance.
A Snapshot of Australia's Cryptocurrency Adoption
Numerous statistics demonstrate that Australians have enthusiastically adopted cryptos.
According to the September publication of Finder's Cryptocurrency Report 2021, 17% of poll respondents said that they possessed cryptos as of June 2021.
Another poll conducted by Finder in January asserted that 25% of Australians either already owned or were planning to acquire cryptocurrency.
When a politician makes a reference to cryptocurrency, the industry takes notice.
While cryptocurrency is by definition decentralised, a centralised public authority's ability to significantly promote or hinder sector activities is contingent on its attitude.
The divergent experiences of crypto traders and professionals in the United States and China over the last several months – as addressed in further detail in An Idea With Currency: The American Quest For A New Crypto Accord and linked next – exemplify this.
While digital currency exchanges have been required to register with AUSTRAC since 2018, Australia's regulatory approach to cryptocurrency has been characterised as 'light touch' – until now.
Significant impetus for reform has developed in the aftermath of the Senate Select Committee on Australia as a Technology and Financial Centre's recent publication of its landmark final report.
It was released in October and includes 12 recommendations aimed at establishing Australia as a prominent crypto hub. Such reforms would take place in the licensing and regulation sectors, as well as in the taxation sector.
The report's first recommendation is for the Australian government to "...create a market licensing regime for Digital Currency Exchanges, including capital adequacy, auditing, and responsible-person tests under the Treasury ministry."
Recommendation 2 calls for the implementation of "a custody or depository regime for digital assets that meets the Treasury portfolio's minimal standards."
In terms of taxation, there are two noteworthy recommendations that, if followed, would have an immediate and noticeable impact on crypto traders and businesses alike.
According to recommendation 6, "the Capital Gains Tax (CGT) system should be changed to require that digital asset transactions generate a CGT event only when they result in a clearly identifiable capital gain or loss."
Recommendation 7 suggests "...that the Australian Government alter applicable legislation to provide a 10% corporation tax rebate to enterprises doing digital asset 'mining' and associated activities in Australia provided they use their own renewable energy to conduct these operations."
Other proposals in the study are certain to spark major debate, such as Recommendation 8's request for a policy evaluation of the possibilities for a central bank digital currency (CBDC).
Similarly, Recommendation 10's proposal "...that in order to increase certainty and transparency around de-banking, the Australian Government should develop a clear process for businesses that have been de-banked" and that it "should be anchored around the Australian Financial Complaints Authority, which services licensed entities," is especially significant given that de-banking is a source of anguish for a sizable portion of the local crypto scene.
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