Australian Liberal Senator Andrew Bragg has introduced a bill to regulate crypto assets so that the country ‘keeps up with the global pace’ in handling rules for digital assets. The bill also mentions potential frameworks for foreign CBDC use in the country.
Senator Bragg noted, “The consequence of Labor’s inaction is clear. Australia is falling behind on consumer protection and investment promotion.”
The Digital Assets (Market Regulation) Bill 2022, subject to public comment through Oct. 31, 2022, also specifies disclosure requirements for Australian facilitators of the Chinese digital yuan (e-RMB) central bank digital currency (CBDC).
Regulations outlined by the draft
The draft has been introduced as “A Bill for an Act to provide for the regulation of activities relating to digital assets and reporting by certain banks that facilitate digital yuan, and for related purposes.”
For this purpose, Australia requires a ‘designated bank to comply with the Digital Yuan Reporting Requirements if the bank has, at any time within the last 12 months, facilitated the availability or use of digital yuan in Australia.’
In addition, the document establishes licenses for stablecoin issuers, digital asset exchanges, and custody services. There is now a requirement for stablecoin issuers to hold a reserve in Australian or foreign currency. In addition, the licensee must make monthly declarations of the amount and kind of assets kept in reserve for the stablecoins and the number of issued stablecoins currently in use, publicly available.
Violations of the set rules also impose civil penalties and even a jail term depending on the severity of the offense. Meanwhile, the Australian Securities and Investments Commission (ASIC) has been handed over the responsibility of supervising the domestic digital sector.
Privacy concerns surrounding digital yuan CBDC
Senator Bragg has been of the view that blockchain adoption could uplift the financial regulatory system as Australia alleviates the trust and confidence problems in the current financial framework. That said, as the Chinese e-yuan gains adoption as a centrally-backed digital currency, critics worldwide have raised privacy concerns.
As the scope of China’s CBDC expands, the private crypto space remains off limits for its citizens. Last month, China introduced the digital renminbi payment system for its Ningbo Rail Transit. After which, 125 stations offered support to e-yuan.
In the past, China has vowed to protect the privacy of digital yuan users as adoption grows. However, it’s unclear how the government plans to provide privacy rights with the restricted anonymity of the CBDC.
With that, China has also made its more extensive web3 plans clear. Previously in July, the Shanghai city government had unveiled its plan for developing a 350 billion yuan (around $51 billion) metaverse industry by the end of 2025. Again, in August, the Chinese local government body announced the “Beijing Urban Sub-Center Metaverse Innovation and Development Action Plan (2022 -2024)” as part of its projects for web3 innovation.