Australian Senate Committee Exploring Crypto Regulation

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In Brief
  • An Australian Senate committee will explore regulating cryptocurrencies.

  • The parliamentary inquiry will also compare approaches taken in other countries.

  • The inquiry will also tackle the issue of “de-banking” by traditional lenders.

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The Australian Senate’s Select Committee on Australia as a Technology and Financial Centre will explore how crypto assets could be regulated in the country.

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The parliamentary inquiry will consider crypto regulation in an effort to strengthen the local fintech sector, while encouraging financial innovation. Although some institutions accept cryptocurrencies, others are hesitant due to the risk from lack of regulation.

Crypto regulation in Australia

The committee chaired by Senator Andrew Bragg will look at the policy and legal backdrop surrounding cryptocurrencies in Australia. It will consider this in light of approaches taken by Canada, Singapore, the United Kingdom, and the European Union. Ultimately, the goal would be the development of a comprehensive regulatory framework for cryptocurrency and digital assets.

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“We want to know what type of policy provision and legal certainty is needed to drive private investment into Australian digital assets rather than the investment occurring offshore,” said CEO of cryptocurrency exchange Independent Reserve, Adrian Przelozny. 

He said that he would appreciate some sort of licensing regime to protect the interests of consumers. Regulation enforced by the Australian Securities and Investments Commission could also give the industry greater certainty, he added.

Debunking de-banking

The committee will also look into the practice known as “de-banking.” This is when traditional banks dump clients they feel are competing with them on regulatory grounds. This issue has proven to be quite pervasive, not only affecting crypto-related firms. For instance, the Australian Competition and Consumer Commission admitted that it is also a problem in the foreign exchange market.

Rebecca Schot-Guppy, CEO of Fintech Australia, called the practice “anti-competitive,” saying it also affected technology-based wealth and payment companies. “De-banking is a significant issue in fintech, one we have been championing with Canberra for the past six months,” she said. Schot-Guppy added that the committee’s review of cryptocurrency regulation was “crucial” to provide consumers greater certainty.

As previously reported, some of the country’s wealthiest families have been buying up digital assets. This is supposedly their alternative investment to get returns, as opposed to stocks or bonds.

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Nick is a data scientist who teaches economics and communication in Budapest, Hungary, where he received a BA in Political Science and Economics and an MSc in Business Analytics from CEU. He has been writing about cryptocurrency and blockchain technology since 2018, and is intrigued by its potential economic and political usage. He can best be described as an optimistic center-left skeptic.

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