Australia’s Senate Committee on Economics Legislation has concluded its review of the “Digital Assets (Market Regulation) Bill 2023,” initially introduced by Senator Andrew Bragg.
The committee’s report, released on Sep. 4, calls for certain amendments to the draft bill, marking a cautious yet essential step toward the comprehensive regulation of digital assets in Australia.
One notable amendment pertains to the definition of regulated digital assets.
The committee recommended the removal of non-fungible tokens (NFTs) from this category. This is a crucial clarification as NFTs, which have unique attributes, differ fundamentally from cryptocurrencies like Bitcoin(BTC) and Ethereum(ETH).
The committee also advised on the classification of stablecoins, suggesting that asset-based tokens such as the Gold and Silver Standard and the BetaCarbon Token should be excluded from the definition of stablecoin. These tokens, linked to physical assets, present different risk factors compared to conventional stablecoins pegged to fiat currencies.
Another recommendation was to extend the transition period for implementing the new regulations from three months to nine months. This extension will allow stakeholders sufficient time to adapt to the new regulatory landscape.
Tax implications of digital asset transactions were also under the committee’s radar.
The Senate urged the Board of Taxation to thoroughly review the tax treatment of digital assets, with the aim of introducing legislation on this matter by early 2024.
Addressing the issue of debanking, or the exclusion of cryptocurrency firms from traditional banking services, the committee urged full implementation of the recommendations by the Council of Financial Regulators.
The concern is that debanking could drive the crypto industry into the shadows, leading to unintended negative outcomes. The Australian Department of the Treasury had previously acknowledged this risk.
The committee’s report highlighted that the lack of robust regulation in the digital assets sector had adversely impacted Australian consumers and investment.
According to the Senate, Senator Bragg’s bill represents the “first serious step towards implementing a comprehensive digital asset regulatory framework… The government has junked the ambitious crypto agenda of the former liberal government, and Australians will pay the price.”
Originally expected to issue its report by Aug. 2, the committee sought multiple extensions—first to Aug. 16, then to Aug. 25, and finally to Sep. 4.
This suggests a level of caution and meticulousness in their review, underscoring the complexity and significance of digital asset regulation in Australia.
With these amendments and recommendations, the committee aims to balance consumer protection with the need for innovation, setting the stage for a more regulated and safer digital asset ecosystem in Australia.