“We want to encourage innovation in crypto assets – innovation creates jobs and growth,” Digital Economy Minister Jane Hume said at the Blockchain Australia event.
“There are many innovative use cases for crypto assets, many of which are not far from becoming mainstream. These include international payments, lending and borrowing, NFTs and asset tokenization,” Ms Hume said.
She confirmed the government would take “minimalist” steps, ensuring regulation was “fit for purpose and technology neutral”, before announcing the publication of a guidance document detailing the government’s proposal.
“The government is taking a stand on crypto assets. This is a forward-thinking position. We are looking into that,” Ms Hume said.
“Australia is serious about implementing regulations fit for the digital age. And emerging technologies like cryptography are essential.
“We are not simply placing crypto in a pre-digital regulatory world. It would be too easy for us in government. But this is not the right way to encourage a thriving industry here in Australia.
According to the minister, regulations should seek to “screen” technology and apply regulations consistently.
“An electronic title deed is no different from a paper version. It is still a title deed. Regulations should not distinguish between the two. Similarly, if title to property is placed on a blockchain and turned into an NFT, it is still title to property,” Ms. Hume said.
“We must regulate the underlying thing, not the means by which it is represented, stored or transmitted.”
The government also intends to establish a market licensing regime for cryptocurrency exchanges, while introducing custody arrangements that would ensure that cryptocurrency investors who hold their cryptocurrencies on an exchange can always access their money.
Hume estimated that the digital asset economy, currently worth $2.1 billion, could reach $68.4 billion by 2030 with appropriate regulatory frameworks.
She also looked at Web3’s ability to provide alternatives and counterbalances to the power of big tech, freeing consumers from Google, Facebook and Apple.
“Crypto assets are a powerful way to grow consumer-owned networks. They ensure a level playing field and do not change the rules.
“Platforms and applications built on Web3 will not be owned by a central gatekeeper, but rather by users who will earn their share of ownership by contributing to the development and maintenance of these services.”
The Digital Services Act to enable the crypto revolution
In a separate speech to the Blockchain audience, Senator Andrew Bragg proposed the creation of new legislation to help Australia fully appreciate the promise and potential of blockchain technology.
Mr Bragg said a digital services law would make Australia one of the only countries facing this problem head-on.
The senator also reported changes in the Companies Actnoting that decentralized autonomous organizations (DAOs) could be the most significant development since the first joint stock companies were listed on the Amsterdam Stock Exchange in 1602.
Additionally, Bragg said the digital asset reform agenda provides an opportunity to reassess the country’s tax and regulatory settings.
“The process of creating a tax system for digital assets can spur comprehensive tax reform. We are applying the tax system to a new and emerging area, carrying out a thorough review of the existing system,” Mr Bragg said.
“The conceptual framework that this process will produce will be a unique opportunity to clean up our regulatory frameworks.
“Right now we are talking and thinking about applying tax laws that apply to the analog economy to the digital world. It is not impossible to imagine that in a decade we will be talking about the opposite.”
He confirmed that the Board of Taxation would review the tax provisions relating to digital assets at the request of the Treasurer.
“This review will need to carefully examine the granular details, clarifying the tax status of, among other matters, initial coin offerings, games to win, airdrops, staking and monetary status of stablecoins and CBDCs.”
Alongside the Board of Revenue review, a symbolic mapping exercise will be organized by the Treasury.
“Clarifying the assets will be a tricky task. We don’t want to put tokens into narrow, inflexible categories. Like the rest of the reform process.
The Digital Services Act, proposed by Senator Bragg, would be guided by four principles: technological neutrality; broad and flexible principles, not a prescribed code; regulation by a minister and not by bureaucratic agencies; and, within government, cooperation and appropriate powers, resources and personnel.
“It will show that Australia is open for business and things are clean and clear.”
