- The lack of regulatory clarity is hampering the growth of Australia’s cryptocurrency industry, as some businesses in the industry are relocating to other countries.
According to The Herald Sun, Australia is preparing to regulate the cryptocurrency industry as part of the government’s effort to modernize the country’s financial system.
On March 21, the government will release a series of documents outlining how Australia’s crypto industry will be regulated. Lawmakers will consult with industry officials on how to approach cryptocurrency custody and market licensing.
As part of this custody regime, the Treasury Department plans to force local cryptocurrency exchanges to hold their clients’ funds within the country – with some potential exceptions.
The new reforms will also address taxation and investor protection of cryptocurrencies.
Commenting on the regulations, Financial Services Minister Jane Hume said that the government wants to make sure the Australian cryptocurrency industry operates within a safer and more secure regulatory framework.
The regulatory framework, which will be based on a parliamentary report by Senator Andrew Bragg, was also supported by Treasurer Josh Frydenberg in December.
Australia seeks to prevent crypto businesses from leaving the country
Earlier this month, Bragg called for speeding up reforms related to cryptocurrencies to prevent businesses from leaving the country and moving to friendlier jurisdictions for crypto. During his speech at the APAC Blockchain conference, the Senator also mentioned that some crypto businesses are leaving Australia due to the lack of regulatory framework.
Bragg predicted that such a trend would have a negative impact on the Australian economy, making it clear that local entrepreneurs should not be “suffocated” by these “heavy-working” cryptocurrency regulations.
This crypto plan, put forward by Bragg, could expand Australia’s crypto industry experience by up to 30 times. According to an analysis conducted by EY, the industry could grow to $68.4 billion by 2030, creating more than 200,000 job opportunities.
Data from a 2021 survey shows that around a quarter of all Australians are involved with cryptocurrencies. The fact that Australia is one of the leading countries in individual cryptocurrency adoption also highlights the need for a new regulatory framework.