The Australian government may soon have a legislative framework like Singapore, the United States, and the United Kingdom, which fosters the growth of cryptocurrencies and the “digital assets” industry. A Senate Committee’s Report has proposed establishing a “market licencing framework” for virtual currency exchanges, as well as new laws governing how exchanges store or hold custody of digital assets. It also advocated for modifications to the way cryptocurrency trades are taxed, which is a concern for many crypto dealers and holders, such that “digital asset transactions only produce a capital gains tax event when they really result in a clearly identifiable capital gain or loss.”
According to the committee’s findings, digital currency exchanges functioned under a “light touch” regulatory framework while jointly “handling billions of dollars in deals yearly.” “The committee believes that a more comprehensive regulatory structure will help the industry evolve,” it stated. “In fact, many in the industry are advocating for tighter regulation to guarantee that customers may have more trust in their companies and that shady operations are weeded out.”
“A licencing framework will indicate that extensive consumer protections are in place, and can also assist in addressing bank concerns about the risks presented by individual digital asset issuers.” This may lower the number of cryptocurrency firms and traders that are “debanked” or denied service by banks since they are regarded as too dangerous. A market licensing scheme is also expected to provide comprehensive consumer safeguards. The committee also proposed establishing a new highly autonomous organization (DAO) firm structure that “developing forms of blockchain-based organisations” might adopt to “clarify how they would function in Australia.”
The committee also recommended that the government alter applicable legislation “such that enterprises doing digital asset “mining” and associated activities inside Australia obtain a 10% company tax credit if they source their own renewable energy for these operations.” The final report follows the release of its third issues article on the subject, which stated that Australia “is well positioned for growth,” but there are various areas that need to be improved for the country’s full potential to be realized. “To provide Australian leadership, the committee has advocated a comprehensive crypto framework.” We’ll compete with Singapore, the United Kingdom, and the United States. “This will spur development and job creation in Australia.”
