The architect of Australia’s first response to regulating digital assets in Australia has lost patience with the new government and has issued his own draft legislation in an effort to push Labor to take action in this area.
Liberal Senator Andrew Bragg co-authored a landmark Senate Select Committee report on digital asset regulation last year, examining issues of regulation and consumer protection, the fintech terror of “debanking” and the taxation of digital assets. and drafted our legislative roadmap with 12 recommendations embraced by the former coalition government.
But in August, Federal Treasurer Jim Chalmers and aInsistent treasurer Stephen Jones announced an additional industry survey to chart Australia’s cryptocurrency landscape. While the news was welcomed by the industry, many hope the government will act quickly to provide assurance.
Senator Bragg decided to intervene and issue a draft bill called the Digital Assets (Market Regulation) Bill 2022.
He has opened consultation on the design until October 31.
Bragg argues that Australia is lagging behind in consumer protection and investment promotion because Labor does nothing.
Australia must keep up with the global race for digital asset regulation,” he said.
“Huge progress has been made under the previous coalition government. The Labor government believes that cryptocurrency is a “scam” and is starting its work from scratch.
Senator Bragg said the bill does the following:
- Introduces licenses for:
- digital asset exchanges,
- Digital Asset Custody Services, and
- Stablecoin Publishers:
- This includes requirements for holding Australian or foreign currency in reserve with an Australian bank and for frequent reporting.
- Establishes disclosure requirements for facilitators of the e-Yuan in Australia, as the e-Yuan is the first CBDC released by a major economy central bank.
Speaking with the Startup Daily show this week, Senator Bragg said that, in hindsight, he would have changed some of his recommendations from the Senate report, but added that it was a fast-moving space and that there are now new emerging threats, such as the e-Yuan.
Addressing the bill, he said: it explains how Australian consumers can be protected with capital requirements, key personnel testing, auditing and disclosure.
“With 20% of the population owning some form of crypto and the rise of central bank digital currencies (CBDCs) issued by states that do not share our Liberal Democrat values, the need for consumer protection in this space is urgent. It’s not just a race for capital and investment in this industry. It’s a race for our country’s future and economy,” Bragg said.
“Waiting is not an option and Australian consumers are currently exposed to an unregulated market.”
Senator Bragg said Australians “are faced with a gaping gap” between investing in a financial product protected by regulation and endless crypto advertising during the football finals.
He also points to the collapse of the algorithmic stablecoin Terra in the US, which cost investors an estimated $60 billion.
“Minimum reserve standards should be introduced to ensure stablecoin issuers provide consumers with at least the minimum standard of consumer protection,” he said.
Bragg is also concerned about China’s digital currency. e-Yuan, an aspect that his October 2020 report did not foresee.
“The reason this law specifically targets the e-Yuan is because it is the first CBDC to be issued by a major economy, and China’s financial influence is particularly relevant in our Pacific region,” he said.
“The e-Yuan could be a much more successful endeavor than China’s attempts to replace the US dollar with the Yuan,” adding that in our own region, where access to banking and payment systems can be challenging and expensive, it can prove to be very popular.