Blockchain Australia wants a safe haven for crypto providers

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Blockchain Australia, the industry body representing local businesses and individuals involved in technology, has offered the federal government three recommendations that it says would drive innovation and competition in crypto assets.

The first, as detailed in its submission [PDF] on the Senate Special Committee on Australia as a Technology and Financial Center, is a haven for crypto asset providers.

“The government and relevant regulators should provide crypto asset providers with a safe haven until such time as they introduce guidelines or legislation. Any legislation should contain an appropriate transitional period and not apply retrospectively,” a- he declared.

“Our businesses cannot afford to wait years for regulatory clarity, and Australian consumers need to be confident that they are able to access the products and services they want at home,” through legally regulated and compliant professionals, rather than seeking risky services in unregulated locations, “he adds.

The industry body also wants more regulatory direction and more commitment to a suitable legislative framework for the short term and the long term.

He considers that an intersectoral and regulatory working group should be established to “facilitate greater communication between the crypto asset industry and regulators” and that the first exercise undertaken by the group should be a token mapping exercise.

Blockchain Australia also believes that the Australian Securities and Investments Commission (ASIC) should receive additional regulatory resources dedicated to crypto assets so that it can implement the industry body’s demands.

Other requests include the requirement for ASIC to update RG133 – the fund management and custodial regulation – to explicitly state that licensed custodians can provide custodial services for crypto assets. , and when it comes to the Australian Center for Transaction Reporting and Analysis, Blockchain Australia wants it to speed up its work with industry on the ‘rule of travel’.

The travel rule was developed with the aim of preventing terrorists and other criminals from having unrestricted access to electronically facilitated fund transfers to move their funds and to detect such misuse when it occurs.

Blockchain Australia also wants the Australian Prudential Regulation Authority, the Reserve Bank of Australia (RBA), the Australian Competition and Consumer Commission and the Australian Taxation Office to play their respective roles.

In addition to a comprehensive token mapping exercise, Blockchain Australia wants a new licensing regime to be introduced, modeled on Australia’s Financial Services Licensing Framework, so that entities wishing to provide general financial advice or personnel relating to crypto assets as part of their business model may be permitted. A safe harbor and a transition period should again be provided, he added.

Finally, the submission calls for a comprehensive review of the marketplace licensing framework, resulting in changes to “ensure that the licensing regime takes into account the unique nature of crypto assets”.

In October 2018, the Federal Government’s Digital Transformation Agency advised those lost in the blockchain buzz to turn their attention elsewhere.

The agency’s chief digital officer, Peter Alexander, looked into its use, saying that “for every use of blockchain you would consider today, there is better technology – alternative databases, secure connections, standardized API engagement “.

Blockchain Australia saw this determination as an obstacle to the consideration and development of the discourse of government and regulators.

“Education is lacking, thoughtful and consistent consultation with industry has been largely absent despite recent efforts by regulators to address these shortcomings,” he writes.

“Blockchain Australia’s perspective is that a truly collaborative approach between government, public and private sectors, facilitated by legal and technology experts in the field, will be paramount to ensure Australia can forge a path towards a more practical and appropriate framework. “

Appearing before the Joint Parliamentary Committee on Business and Financial Services on Monday as part of its investigation into mobile payment and digital wallet financial services, representatives of the RBA were asked about the use of cryptocurrency in Australia.

“The bank has been monitoring cryptocurrencies closely since around 2013 – we just don’t see them being used as a form of payment in Australia,” said Anthony Richards, RBA’s payment policy manager.

“Some people invest in cryptocurrencies and they do so at their own risk because it is highly speculative, they are not backed by anything.”

Addressing remarks made earlier this month, when the bank said it saw no political arguments for an electronic Australian dollar, Richards said the use of crypto in day-to-day operations is not something something the RBA considers will happen in the near future.

“We think it’s important to have a regulatory framework that covers them, but on the other hand, it’s not something that keeps us awake at the moment, fearing that Australian consumers will suddenly switch, into mass, to the use of stablecoins or cryptocurrencies, ”he said. .

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