The widespread crypto-economy has led a Senate committee on the Australia as a Technology and Financial Center [ATFC], to present its final report in Parliament to regulate the global digital economy. The report detailed 12 recommendations for the regulation of digital assets along with the fintech industry.
Like the rest of the world, Australia was also waking up to the realization of the need for regulatory clarity with the booming crypto market. In its new report, the Senate proposed new licenses for crypto exchanges, new laws to govern Decentralized Autonomous Organizations [DAOs], mending of capital gains tax in DeFi, and a tax discount for crypto miners who use renewable energy.
It looked like the Senate had paid attention to various aspects of the crypto-economy in the country and charted a plan of action to not only regulate it but also to allow support to innovation. As per reports, one of the important recommendations made by the Senate was to establish a new DCE Market License for digital currency exchanges.
This included requirements relating to capital reserves and auditing. However, the requirements did consider the small operators to keep them functioning in the market.
About Capital gains tax rules
As per reports, the tax rules should be updated to offer more clarity for the investors of crypto assets and DeFi staking. Further, as per the committee, the capital gains tax should only be applied when crypto transactions “genuinely result in a definable capital gain or loss.”
About CBDC and mining
Like other nations, Australia has also begun paying attention to the viability of a central bank digital currency [CBDC] as the Treasury leads a policy review. Meanwhile, to tackle the environmental concerns that come along with mining, the committee has recommended a 10% tax discount for miners using renewable energy.
New regulatory structure for DAOs
“DAOs do not clearly fall within any of Australia’s existing company structures… this regulatory uncertainty is preventing the establishment of projects of significant scale in Australia.”
As per the committee, since there was no established regulatory structure for DAOs, it will work to form a basis for these which referred to decentralized community ownership and governance of a protocol.
The committee has not independently taken these decisions but worked with industry players like BlockchainAustralia, leading exchanges, R3, and Ripple. According to the taxation office, nearly 60,000 taxpayers have invested in digital assets in recent years, and a report suggested 17% of Australians currently owned crypto.
These growing value of the investments, has pushed the country to form better regulations to secure the crypto users and their investments.