The Australian government is working on new regulations for the digital currency industry, it has revealed. With Australians adopting digital currency at a high rate in recent years, the government wants to use enabling regulations to “take the industry out of the shadows.”
The government believes it’s time financial regulations evolved to reflect the drastic changes in payment methods. More Australians are now turning to digital payments, with over 55 million cashless transactions worth about AUD 650 billion (US$466 billion) taking place every day, according to a Reuters report quoting government data.
Treasurer Josh Frydenberg pointed out that digital currencies are pretty popular in the country, with over 800,000 Australians invested in the asset class. As such, the government must develop a regulatory framework that not only protects the investors but also legitimizes the industry and potentially allows it to go mainstream.
In an interview with 7NEWS, Frydenberg stated that the government is “broadening the definition of services and products that can be regulated.”
“We’re taking this area out of the shadows and bringing it into a considered regulatory framework which is world leading,” he told the outlet.
For virtual asset service providers, the government will be looking to properly license them, providing greater certainty and security to their customers, Frydenburg, who took office in 2018, pointed out.
In a report by Reuters last Dec. 8, the Treasurer pointed out the need for regulating the financial services industry in a separate speech. Stating that if regulations fail to evolve with the times, “it will be Silicon Valley that determines the future of our payment system.” He added that only through regulating the new era of digital payments can Australia retain its sovereignty over its payments system.
The Ministry of Treasury also sees great potential in a digital dollar. “We’re also going to be working with the Reserve Bank to look into the feasibility of introducing a central bank digital currency which would be a world-leading initiative as well,” Frydenberg stated.
The Reserve Bank of Australia has long expressed its opposition to digital currencies, which it claims undermine the monetary system. A few weeks ago, a senior executive at the bank tore into digital currencies, saying that fad and fear of missing out (FOMO) will end soon, and they will collapse once stablecoins and CBDCs take root.
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