Australia has a new Prime Minister, Anthony Albanese, who came to power on 23rd May 2022. His in-tray is full, with cryptocurrency as one of the top 3 issues he needs to resolve within the first 100 days in office. Formal markets want cryptocurrency regulation to take precedence as a stop-gap measure of taming inflation. However, its formalisation shouldn’t be conclusive but a precursor to future financial technology (FinTech) innovation.
Continuation from Where the Outgoing Government Stopped
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Scott Morrison, the outgoing Prime Minister, and his government began the regulation journey to align with the new world order. If the new Prime Minister continues on the same trajectory, Australia will be one of the few countries in the world with formal cryptocurrency regulation laws. In the long run, the government can play a key role in influencing FinTech innovation and increasing money supply within the economy. Caroline Bowler, BTC Markets’ CEO, echoed these sentiments, pointing out that the regulation creates a structured market, leading to more innovations in the future.
To entrench this policy to investors, financial players argued that the government should walk the talk. They should provide incentives for cryptocurrency investments, among them taxation. Favourable taxation policies increase investments, which draws comparison with other nations. In the long run, progressive policies inspire confidence, improving the country’s ranking in crypto-trading.
Policy Initiatives and Cryptocurrency Trading in Australia To Date
The closest Australian authorities came to acknowledging cryptocurrency trade was on 12th May 2022, when the first ETF (exchange-traded funds) opened its doors. Digital currency enthusiasts traded their coins freely, signalling the birth of legal crypto trading in Australia. It benefited, not only the FinTech sector, but also storing of digital assets. Considering cryptocurrency growth in the recent past, this is a turning point for Australia, if not the entire Far East Asia countries.
Previous regulation discussions didn’t end well as the government and crypto traders didn’t agree on payment systems. However, the recent developments show progress within the sector. The government has initiated payment system reforms to allow financial institutions to accept digital currency trading. Crypto Lists can trace these developments back to March 2022, when there were policy discussions on crypto taxation, customer protection and crypto-exchange regulation.
Global Response to Cryptocurrency Regulation
Terra’s collapse opened a new Pandora’s box in crypto-regulation, especially among first world countries. On 19th and 20th May 2022, Finance Ministers and Central Bank Governors from the G7 countries met in Germany to discuss crypto regulation. They resolved to engage the Financial Stability Board (FSB) to advance its policies for strict and stable financial regulation, indirectly stabilising crypto trading.
The United States government speedily adopted this resolution. Their worry came after Coinbase’s assertion that its customer’s wallets were part of its properties and would likely go in case of bankruptcy. Biden’s administration wants to criminalise such policies, noting that it infringes on investors’ rights.
Anthony Albany’s decision is part of these efforts to protect Australians from losing their investments. The recent inflation forced the financial sector to adopt measures that control money supply. They need to keep investments going, which improves the economy’s GDP. Cryptocurrency is rapidly growing in the financial sector. Proper regulation will propel Sydney and Australia as the top destinations for financial excellence in Asia.
Other countries regularising crypto trading include Cyprus, South Korea and Portugal. El Salvador not only wants to institute trade licensing but also adopt Bitcoin as a unit of measure and medium of exchange. Cryptocurrency is attractive because of its global acceptability, security, and relaxed regulation. Furthermore, it has no government interference or money supply policies. The government only offers trading frameworks within which the trade can grow.
Crypto Lists will follow the process and break down the regulatory frameworks for better understanding. It will also observe ETF trading protocols and follow Anthony’s promise within the first 100 days.