“Australia needs to establish new rules for digital asset miners, such as tax breaks and a licencing framework for crypto exchanges, to be competitive with Singapore, the United Kingdom, and the United States,” according to a Senate study.
The study, released on Wednesday by the Senate’s Committee on Australia as a Technology and Financial Centre, also asks for clarification on when banks can decline to engage with a corporate customer who is involved in cryptocurrencies.
According to the study, Australia must change its regulations to allow room for organisations with a “decentralised autonomous business structure,” as well as its tax rules so that people only pay taxes on trading digital assets when they make a “clearly defined financial gain.”
“It means Australians will have greater control over their financial fate rather than being reliant on unending intermediation,” committee chair Andrew Bragg explained.
“To ensure Australian leadership, the committee has suggested a comprehensive crypto framework. We’ll compete with Singapore, the United Kingdom, and the United States, “He said.
Australia has failed to keep up with the expansion of the digital asset economy, which includes crypto exchanges, blockchain-based security tokens, and non-fungible tokens, or “NFTs,” which provide ownership of online properties.
According to the study, the Australian Taxation Office has seen a “dramatic rise in trade” since early 2020, when COVID-19 lockdowns prompted a frenzy of online investing activity, driving the values of several cryptocurrencies to record highs.
However, estimates of the entire size of the Australian digital assets industry vary greatly. According to finder.com.au, a sixth of Australians will hold cryptocurrencies worth A$8 billion ($6 billion) by 2021, with bitcoin being the most popular.
Participants in the digital sector praised the study but cautioned that laws needed to change quicker.
It has “strong recommendations,” but “the speed at which we’re attempting to really execute legislative reform and the speed at which this technology is developing are just poles apart,” according to venture capital investor Mark Carnegie, who has a stake in digital assets.