In a move to try and modernize its economic and financial system, Australia has announced that it will aim to integrate crypto much more into its economy.
In a bid to replicate models used by the European Union and Singapore, the Aussie government is planning to unveil a regulatory framework that will comprehensively broaden digital assets and cryptocurrencies into the existing fiat economy. This will come as good news for those in the fintech and iGaming industries within the country. The likes of the iGaming industry have already been growing in the country, and whilst players have a chance to use crypto casinos, some of the best of which offer great promotions for customers (Source: https://99bitcoins.com/best-bitcoin-casino/crypto-casinos-australia/ ), there is still a lack of widespread use of crypto in the country. It is hoped this legislation will change that.
Ministers, as part of the Australian Treasury, have published a white paper that focuses on embracing tokenization, RWA’s (real world assets) and implementing central bank digital currencies (CBDCs) into the wider economy in the country to try to modernise and keep up with global trends.
The white paper reveals that the Australian government, in collaboration with the Australian Treasury, plans to partner with the ASIC (Australian Securities and Investment Commission) and the Reserve Bank to initiate pilot programs aimed at evaluating the impact of the proposed changes. These trials will concentrate on integrating tokenized money into wholesale tokenized markets, effectively testing the application of cryptocurrencies and digital assets within institutional financial transactions. If successful, these pilots could pave the way for broader adoption of digital currencies in everyday retail payments.
The government sees this initial pilot as a way of ironing out issues before venturing out into retail CBDCs, but seems to have the view that this is the way forward, noting that “ Markets for tokenized assets may be able to increase automation… reduce transaction costs, and provide broader access to traditionally illiquid assets ”. The Australian Treasury seems to be broadly excited about the implementation of the technology to allow Australian companies and industry to grow alongside the rest of the developing world, as the government outlines that they want to ‘align with the international best practice’ and ‘spur innovation and increase competition by providing certainty to industry’.
The regulations and introduction of these measures in Australia would require a regulatory body in the country, which has also been highlighted in the white paper, as it outlines the need for a licensing structure for crypto exchanges (dubbed in Australia as the DAPs – Digital Asset Platforms). The licensing will mean DAPs will need to meet financial obligations and disclosure requirements, as well as operate with third parties when storing customer assets to operate lawfully under the new proposed regulations.
The impact of these changes identified in the white paper would be monumental in integrating digital assets into the Australian economy and could see them propel the country into one of the global leaders in digital economies.
Clear regulations would see investors become more confident and offer a much safer, secure platform for investors in Australia. This is likely to drip down from the initial institutional participants in the pilot to retail following this. A marked increase in confidence would see an increase in popularity from the public in the crypto market that, in turn, would drive the industries expansion.
This would allow Australia to become an attractive destination for global businesses and investors who primarily deal in crypto, which is sure to bring in additional revenue and custom to the isolated Australian economy, an avenue for combating the increasing demand on the government to tackle the rising costs of living for the public.
Whilst this innovative move towards crypto by the Australian government is being viewed generally as a positive with enhanced consumer protection, trading transparency, and business growth opportunities, which anchor innovation and technology at their core, there could be wider adverse implications for some.
Compliance costs in line with the regulations are likely to isolate smaller businesses, which could lead to the consolidation of larger firms in the industry and an inability to diversify the market. This would be a huge barrier for emerging crypto platforms and smaller, more independent businesses. Likewise, the whole plan for this thriving crypto environment within Australia is heavily reliant upon the effective and successful implementation of the new requirements. Nothing like this is ever certain and does require careful planning and communication from those making the decisions to allow the successful flourishing of the proposed regulations.
