The Australian Government has listened to the cryptocurrency industry and has appointed a new committee to oversee the long-sought regulatory development in sectors worth trillions of dollars worldwide.
Over 800,000 Australians have already traded cryptocurrencies in the last three years, using popular digital currencies such as Bitcoin and Ethereum, and the rate of increase since 2021 is 63 compared to 2020. Recorded a% increase.
The Financial Regulatory Authority Council, which consists of the Treasury, the Reserve Bank of Australia, and other government agencies, leaves regulatory design to two separate groups.
The first Working Group on Cryptocurrency Regulations aims to strengthen consumer confidence by establishing a streamlined framework for cryptocurrency transactions between customers and businesses.
Second, it addresses industry concerns about “debanking,” a phenomenon in which banks refuse to trade with cryptocurrency exchange platforms. This is a gateway for consumers to exchange dollars for digital currencies.
The announcement comes shortly after Australian Finance Minister Josh Frydenberg confidently reveals that the new system will be operational by mid-2022.
“Currently, several central banks around the world are developing their own digital currencies, so we cannot allow ourselves to be deprived of our rights in this new era of digital payments.”
To this end, Frydenburg has revealed that the government is also discussing the feasibility of retail central bank digital currencies in Australia and will provide advice by the end of 2022.
Debanking of “Debanking”
Australian crypto stakeholders have long expressed concern that the lack of regulation allowed banks to refuse to do business on crypto exchanges, curbing industry growth in the process. rice field.
Swyftx is one of the country’s largest digital asset brokers with a monthly trading volume of approximately $ 3 billion (US $ 2.2 billion), and like many other transactions, many have been delayed or completely suspended. explained.
“These issues are consumer confidence in the digital asset industry because they fear that customers will be denied access to flat funds as a result of some form of’fraud’on the part of digital asset service providers. “It spoils,” Swyftx said in his submission. ((((pdf) A study of Australia’s future as a technology and financial hub.
Swyftx has also accused traditional financial institutions of anti-competitive behavior. Since then, Commonwealth Bank has become Australia’s first and only bank to allow customers to buy, sell and hold cryptocurrencies. “
However, joint submission (pdfAccording to the Ministry of Interior and the Australian Center for Transaction Reporting and Analysis (AUSTRAC), banking hesitation is based on concerns about illegal activity related to cryptocurrency transactions.
In particular, banks were concerned that currently completely anonymous digital currency transactions are at high risk of violating the Anti-Money Laundering and Anti-Terrorism Financing Act (AML / CTF Act).
The law already shows that Australian banks have fined billions of dollars for violations. This includes a $ 700 million fine for the Commonwealth Bank in 2018 and a $ 1.3 billion fine for the Westpack in 2020.
Rob Nichols, an associate professor of regulation and governance at the University of New South Wales, said financial institutions have incentives to further reduce the risk of engaging in illicit trade.
“You have a lot of banks that have been pinged for millions of dollars. In that context, the easiest way to mitigate risk is to debank,” Nichols said earlier in the Epoch Times. I told the time report.
However, Nichols explained that the new regulatory framework addresses this by granting cryptocurrency brokers a special license similar to that given to banks, shifting responsibility for illegal transactions to the brokers themselves. ..
Cryptocurrencies and illegal markets
The digital asset industry has categorically refuted the idea that cryptocurrencies increase the risk of illegal market transactions.
Blockchain Australia, Australia’s largest cryptocurrency institution, states that high-level fraudulent transaction proposals related to digital currencies are “myths.”
Blockchain Australia’s claim is theoretically supported by a report by Chainalysis, an organization whose mission is to “promote the secure adoption of cryptocurrencies by building trust between financial institutions, governments, and crypto businesses.” Has been done.
Chainalysis ‘2021 Crypto Crime Report (pdf) States that in 2020, only 0.34% of the world’s cryptocurrency transactions, or $ 13.7 billion ($ 10 billion), is associated with illegal activity.
However, although you can publish and view them in your public ledger, cryptocurrency transactions are notorious for being anonymous in nature and difficult to track.
This is a consideration made by Chainalysis in the report, acknowledging that the number of illegal transactions found was set to increase as it happened in the iterations of the previous report.
Specifically, in 2020, Chainalysis predicted that 2019 illegal transactions would be 1.1% of all transactions, or about $ 15.3 billion (US $ 11.2 billion). In 2021, this figure increased by 2.1%, or about $ 29.2 billion ($ 21.4 billion).
The actual illegal market share of cryptocurrencies is unknown, “Sex, Drugs, Bitcoin: How Much Illegal Activities Are Funded Through Cryptocurrencies?It is estimated that 46% of Bitcoin transactions alone, or $ 76 billion, are due to illegal transactions.