Australia to regulate crypto in overhaul of payments industry

The move is the latest effort by the country to rein in the power of technology companies.

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Australia is moving to regulate cryptocurrencies after leading global efforts to rein in big tech firms [File: Chris Ratcliffe/Bloomberg] (Bloomberg)

Australia will create a licensing framework for cryptocurrency exchanges and consider launching a retail central bank digital currency as part of the biggest overhaul of its payments industry in a quarter of a century.

The country will also broaden its payment laws to cover online transaction providers like Apple Inc and Alphabet Inc’s Google as well as buy-now-pay-later (BNPL) providers like Afterpay Ltd, ending their run of operating without direct supervision.

“If we do not reform the current framework, it will be Silicon Valley that determines the future of our payment system,” Treasurer Josh Frydenberg said in prepared speech notes supplied to Reuters. “Australia must retain its sovereignty over our payment system.”

Australia’s conservative coalition government has been at the forefront of global efforts to rein in large technology companies as it prepares for a federal election by next May.

The Liberal-National government, which is behind the left-leaning Labor Party in most polls, has already this year made Big Tech pay media companies for content and take legal liability for defamation on their platforms.

(Do you mean The Liberal national government?)

The government will begin consultation early next year on establishing a licensing framework for digital exchanges, which would allow the purchase and sale of crypto assets by consumers within a regulated environment, Frydenberg said in the prepared remarks.

There would also be consultation on a regulatory regime for businesses that hold crypto assets on behalf of consumers, and on the feasibility of a central bank digital currency, he added, with advice to be provided by the end of 2022.

‘Consumer benefits’

Australia’s banks and other payments industry participants have long campaigned for the rules to apply to all parties involved in processing transactions.

A spokesperson for Afterpay, which has agreed to a buyout by Square Inc, the payments firm of Twitter Inc founder Jack Dorsey, said it supported “any approach that takes into account consumer benefits from the innovation and competition Afterpay has brought to the market”.

Spokespeople for Apple and Google were not immediately available for comment.

Source: Reuters