Senate Committee hands down report on future of cryptocurrency

Australia has the potential to become a global cryptocurrency powerhouse that would see billions of dollars passing through our shores.

Australia has the potential to become a global cryptocurrency powerhouse that would see billions of dollars passing through our shores, according to parliament’s first investigation into the new payment technology.

Having taken what committee chair Andrew Bragg called a “six-month deep dive” into cryptocurrency, the Senate’s Select Committee on Australia as a Technology and Financial Centre handed down its report Wednesday night

“We want people to have the ability to use cryptocurrency because it gives them more agency and more choice,” Senator Bragg said.

“It disrupts big players, and has been hugely successful in up-ending things like international payments.

“If we follow the recommendations of this report, we have the potential to be a crypto leader like Singapore and the UK.”

A cryptocurrency exchange branch near the Grand Bazaar in Istanbul. Picture: Ozan Kose / AFP

In Singapore, for example, legislation passed earlier this year made the island nation a standout that many in the business see as world leading, due to a generally supportive attitude towards the industry.

When asked the potential value of the crypto sector to Australia, Mr Bragg said it could run into the “billions”.

The report cited a number of cryptocurrency brokerages who found that the reaction of banks was harming their ability to do business in Australia.

“The unwillingness of traditional banks to facilitate digital asset businesses by refusing to do business with them has introduced an unnecessary and significant risk to both the growth and innovation of the digital asset businesses and also to Australian consumers,” said Swyftx, a local crypto dealer in a submission.

Among the recommendations of the committee are that Australia establishing banking-style rules around capital adequacy and auditing, that anti-money laundering and counter-terrorism financing regulations be clarified to better account for crypto, and that better rights be given to those who have been “de-banked”, or seen their accounts closed because of crypto activity.

“We can’t be a crypto hub if banks keep acting against people.

“We are calling for a new system of regulation and giving people the right of appeal through the Australian Financial Complaints Authority,” Senator Bragg said.

Senator Andrew Bragg in his office at Parliament House in Canberra. Picture: NCA NewsWire / Gary Ramage

The ability of big banks to smother crypto brokerages and related businesses was a frequent theme of the inquiry.

Peer to peer Bitcoin exchange Bitcoin Babe said that “many participants in the digital asset space either start off as, or remain, small businesses. They may not have teams of lawyers and policy advisers who are able to step in and negotiate with large banks or regulators.

“Founders and owners of small businesses risk losing everything at the whim of the banks and regulators, even when fully compliant. The personal toll this takes and how this affect the mental health of small business owners and employees is significant.”