Building on the Work of the Outgoing Government
The previous Prime Minister, Scott Morrison, and his government took the first steps toward regulating cryptocurrency to align with global financial standards. If the new Prime Minister continues this path, Australia could become one of the few countries globally with formal cryptocurrency regulations. Over time, the government’s involvement could play a pivotal role in fostering FinTech innovation and boosting the money supply. Caroline Bowler, CEO of BTC Markets, emphasized that regulation would create a more structured market, paving the way for future innovations.
To reinforce this policy with investors, financial stakeholders believe that the government must follow through with concrete actions. They advocate for incentives, particularly favorable taxation policies, to encourage cryptocurrency investments. Such policies would enhance investment flows and place Australia in comparison with other nations. Over time, progressive policies will build confidence, improving the country’s standing in global cryptocurrency markets.
Government Initiatives and Progress in Cryptocurrency Trading in Australia
The closest Australian authorities have come to recognizing cryptocurrency trading was on 12th May 2022, when the first ETF (exchange-traded fund) was launched. This marked the beginning of legalized crypto trading in Australia, benefiting the FinTech industry and the storage of digital assets. Given the recent growth of cryptocurrency, this is a significant milestone for Australia, and possibly for the entire East Asian region.
Earlier discussions on cryptocurrency regulation had stalled due to disagreements between the government and crypto traders over payment systems. However, recent developments indicate progress in the sector. The government has initiated reforms to payment systems, enabling financial institutions to accept digital currency transactions. CryptoChipy traces these efforts back to March 2022, when there were talks about crypto taxation, customer protection, and crypto-exchange regulations.
International Response to Cryptocurrency Regulation
The collapse of Terra has reignited the global debate over crypto-regulation, especially among first-world nations. On 19th and 20th May 2022, finance ministers and central bank governors from the G7 countries met in Germany to discuss cryptocurrency regulations. They resolved to engage the Financial Stability Board (FSB) to promote policies that enforce strict financial regulations, indirectly stabilizing crypto markets.
The U.S. government quickly aligned with this resolution. Their concern stemmed from Coinbase’s declaration that its customer wallets were considered part of its assets and could potentially be claimed in case of bankruptcy. The Biden administration is working to criminalize such policies, arguing they violate investors’ rights.
Prime Minister Albanese’s decision is part of these global efforts to protect Australian investors. The recent rise in inflation has forced the financial sector to adopt measures aimed at controlling money supply. The goal is to keep investments flowing, which in turn boosts the country’s GDP. Cryptocurrency’s rapid growth within the financial sector means proper regulation could position Sydney and Australia as key hubs for financial excellence in Asia.
Other countries moving toward crypto regulation include Cyprus, South Korea, and Portugal. El Salvador, in addition to introducing trade licensing, also aims to make Bitcoin a unit of account and a medium of exchange. Cryptocurrency remains attractive due to its global acceptance, security, and minimal regulation. Governments focus on providing trading frameworks rather than interfering with monetary policies.
CryptoChipy will monitor the situation closely, providing updates on regulatory developments and ETF trading protocols. We will also track Prime Minister Albanese’s commitments within his first 100 days in office.
