Australian Government Releases Response on Digital Currency & FinTech Regulations

The Australian Government has released a 5-page report detailing its response to the recommendations made by the Australian Senate Economics References Committee last year, which called for all digital currency exchanges within the country to be brought under existing anti-money laundering (AML) and counter-terrorist finance (CTF) regulations.

The Senate Committee’s report also recommended that digital currencies should be treated as traditional fiat currencies for the purpose of eliminating double-taxation under current GST statutes, which the Australian Government agrees with.

The report states:

“The Government agrees that consumers should not be subject to the GST twice when using digital currency to purchase goods and services.”

In February of this year, Australian Prime Minister Malcolm Turnbull and Treasurer of Australia, Scott Morrison, announced the formation of the FinTech Advisory Group, an organization which will be advising the Treasurer on all matters relating to digital currencies and blockchain technology.

According to Australia’s Treasury, the FinTech Advisory Group will play in integral role in formulating the new GST rules for digital currencies:

“The Government is working with the FinTech Advisory Group on options to reform the current GST treatment of digital currencies and has released a consultation paper for public consideration as part of the 2106-17 Budget.”

The response also revealed that the Reserve Bank of Australia and the Australian Securities and Investments Commission will be given sufficient regulatory power to oversee new payment systems, as well as existing and upcoming digital currency payment networks.

As part of the regulatory overhaul, Australia’s Government will also be establishing a Digital Economy Taskforce, which will be collaborating with the FinTech Advisory Group on examining the “uses, opportunities and risks associated with digital currencies.”

Regarding the amendment of existing AML/CTF rules, the report explains that the Australian Government is awaiting a review of all existing regulations by the Minister for Justice, prior to making any specific recommendations:

“The review is considering a range of measures to support the development of the FinTech industry, including whether Australia’s existing AML/CTF regime should be extended to include convertible digital currency exchanges and how to make the obligations under the AML/CTF regime technology neutral.”

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