Australian Finance Minister Josh Frydenberg has announced a review of payment systems that cover cryptocurrencies, buy now, pay later (BNPL), and regulations surrounding digital wallets.
In a speech to the Australian-Israel Chamber of Commerce (AICC) on December 8, Frydenberg said Australia has the opportunity to become one of the world’s leading countries in leveraging new technologies.
“This represents the most important reform of our payment system in 25 years,” he said.
The Morrison government plans to implement protection and regulation for Australians entering the global cryptocurrency market. This includes a licensing framework that regulates the purchase and sale of digital currency assets.
“We are in the midst of a digital revolution,” he said. “COVID has accelerated and changed the way Australians and businesses work on digital technology. Many new and innovative technologies are emerging throughout the economy and affecting every part of our lives. . “
The use of cash and checks in society is declining. Over the last decade, cash use has dropped from two-thirds of consumer payments to less than one-third now. Checks are currently used only in 0.2% of non-cash payments, down from 85% in 1980.
Meanwhile, almost half of Australians now pay using their mobile phones and have 5 million active BNPL accounts.
The global cryptocurrency market has also grown to over US $ 2 trillion (A $ 2.8 trillion), with approximately 220 million participants worldwide.
“Despite this turmoil, the regulatory framework for managing payment systems has changed little over the last 25 years,” Frydenberg said. “Given the pace of change and the people who lead it, it will be Silicon Valley that will determine the future of payment systems without reforming the current framework.”
“Australia needs to maintain sovereignty over the payment system.”
Reforms will be accelerated and by the end of 2022, payment and cryptographic regulatory consultations, frameworks and strategic plans will be finalized.
“Our reforms aim to ensure that only legitimate providers participate in the system and are properly regulated with’traditional’providers that provide similar services to consumers.” He said.
Caroline Bowler, CEO of BTC Markets, welcomed the “ambitious scope” of the change and the speed at which the government plans to implement it.
“It’s a shame that our regulations are out of step with international peers such as Singapore, Canada and the United Kingdom,” she said.
Westpac CEO Peter King welcomed the announcement, stating that payment systems need to adapt to the digital age.
“Modernizing our payment infrastructure and its regulations, including cryptocurrency regulations, will strengthen our financial system and improve customer protection,” he said.