“Huge Opportunity”: Coalition Consults on Central Bank Digital Currency | Crypto-currencies

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Consumers who use cryptocurrency exchanges and buy now, pay for services later could be protected by what Federal Treasurer Josh Frydenberg would be the biggest reform of Australia’s payments system in 25 years.

Frydenberg, in a speech on Wednesday, will promise a “comprehensive payments and crypto-asset reform plan” to spur innovation and consumer adoption of digital technologies.

Throughout 2022, the federal government will consult on potential reforms, including a central bank digital currency, a licensing framework for digital currency exchanges, and addressing the issue of fintech debottlenecking (where banks refuse to ‘offer services to certain people or companies).

The package aims to give the federal government more oversight, including increased powers for the treasurer to set rules for payment systems. The Coalition claims this would translate into better fees, transparency and competition in the buy now, pay later market.

The crypto reform proposal promises that consumers would be allowed to buy and sell assets in a regulated environment, with new rules for companies that hold crypto assets on behalf of consumers.

Investing in cryptocurrency is becoming more common in Australia, with the Commonwealth Bank announcing in November that it will allow customers to buy and sell cryptocurrency on its platforms.

But the sector is still poorly regulated. On Tuesday, myCryptoWallet, one of the country’s most prominent cryptocurrency trading platforms, reportedly collapsed.

Australia is already seen as a market leader in buy now, pay later tech, due to the success of ASX-listed Afterpay, whose shares soared during the pandemic before being bought for. 39 billion Australian dollars by the American fintech giant Square.

According to a draft of his speech, Frydenberg will tell the Australia-Israel Chamber of Commerce and Industry that the reforms would help businesses by removing “the ambiguity that may exist over the regulatory and tax treatment of crypto assets and new methods of trading. payment “.

“For consumers, these changes will establish a regulatory framework to support their growing use of crypto assets and clarify the treatment of new payment methods,” he said.

Frydenberg notes that up to 17% of Australians own cryptocurrency, warning that without regulatory changes it will be “Silicon Valley that will determine the future of our payment system.”

“Australia must retain sovereignty over our payments system. These are important changes that we must face.

“What is clear is that if we embrace these developments, Australia has a huge opportunity to capitalize on the convergence between finance and technology.”

Frydenberg cites the fact that Australia’s tech sector already generates $ 167 billion in production and employs 850,000 people.

There are over 220 million participants in the global crypto markets, with assets worth over $ 2,000 billion.

“Australia has the opportunity to be among the leading countries in the world to take advantage of this new technology,” Frydenberg said in Wednesday’s speech.

Much of the reform package has yet to be determined in consultation with industry, including a “strategic plan for the payments system” to be delivered by mid-2022. A federal election is scheduled by May.

The Commonwealth plans to consult with financial regulators, states and territories to address the issue of “debanking.”

Gerard Brody, managing director of the Consumer Action Law Center, hailed the consultation as “an opportunity to secure [Buy-Now Pay-later] is regulated in an efficient and consistent manner with other credit products, to deal with the significant risk of indebtedness and financial stress associated with these products ”.

“There is no doubt that crypto exchanges need to be regulated more like banks – these entities now hold significant amounts of money and investments, and there has to be accountability,” he said.

In August 2019, Frydenberg set a timeline to legislate the recommendations of the Hayne Royal Commission on Banking and Financial Services.

In January 2021, Guardian Australia revealed that more than half of the recommendations had either been dropped or had not yet been fully implemented.


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