Australian Senators Want Country To Be A Major Crypto Hub

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An Australian Senate investigation resulted in several proposals to encourage digital and crypto companies to establish a base in the island country. Some of this committee’s proposals include changes to existing tax laws, licenses and regulatory requirements.

According to committee senators, the current regulatory framework for crypto in Australia is inadequate. Senators believe that if these new proposals are accepted into law, they could allow Australia to be the next hub of digital innovation.

License change for crypto exchanges

The select committee on Australia as a technology and financial center is tasked with researching and proposing better regulations for crypto and digital assets. The committee notes that these assets are very poorly regulated.

The committee proposed 12 recommendations that involve new licensing requirements for cryptocurrency exchanges and digital asset custody companies. Some of these recommendations include the formulation of proposals that will enable these companies to comply with anti-money laundering and terrorist financing requirements.

The committee said the investigation led to the discovery that some exchanges operating in Australia were not fully regulated despite managing billions of dollars in trading volumes each year.

Cryptocurrency exchanges wishing to operate in Australia need only register with AUSTRAC, an anti-money laundering regulator. This creates a regulatory gap as AUSTRAC’s regulatory oversight does not cover investor protection.

The Australian Senate Special Committee on Fintech and RegTech was first established in 2019. The chairman of this committee is Andrew Bragg, and the committee is now known as the Bragg Inquiry. The main objectives of the committee revolve around the crypto industry and strengthening the regulatory environment for companies operating in the sector.

Committee discusses crypto taxes

The committee also addressed the giant issue of capital gains taxes charged for digital currency transactions. The committee’s recommendations stated “where there is a clearly definable capital gain or loss” after the establishment of a transaction.

However, the committee’s recommendations did not specify when capital gains taxes would be charged after a transaction. The committee also recommended a 10% tax cut on companies that used renewable energy to mine cryptocurrencies.

According to Bragg, these recommendations would encourage innovation and protect consumers. Bragg said he intended to make the proposals law within 12 months. He worried about the “brain drain and loss of good people” as the Australian crypto market moves to offshore locations.

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