‘Big opportunities’: Labor unveils crypto plan for Australia

Treasurer Jim Chalmers has unveiled a plan aimed at promoting innovation in the country’s cryptocurrency sector, saying the fast-changing world of digital assets could have wider benefits for the economy.

The federal government on Thursday night launched a framework it said would provide the next steps in developing Australia’s digital asset industry as it seeks to strike a balance between backing innovation in the sector while protecting consumers.

Treasurer Jim Chalmers.Credit: Alex Ellinghausen

Cryptocurrencies, a type of digital asset, have enjoyed a resurgence under US President Donald Trump, who has vowed to take a more crypto-friendly approach, including creating a national digital assets strategic reserve for the US. But the asset class remains polarising, with many regulators sceptical about the crypto sector due to its problems with scams and high volatility.

A statement from Chalmers, Assistant Treasurer Stephen Jones and special envoy for cybersecurity and digital resilience Andrew Charlton, released on Thursday evening, said the government was intent on providing “clarity and certainty” to the digital asset sector.

“We know that digital assets and blockchain represent big opportunities for our economy, financial sector, payments industry and capital markets,” the statement said.

“We want to seize these opportunities and encourage innovation at the same time as making sure Australians can use and invest in digital assets safely and securely with appropriate regulation.”

The government said its plan would mean businesses that hold cryptocurrencies on behalf of consumers would be covered by a digital asset platform regime, which would make sure they comply with rules on safeguarding customer assets as well as obligations that apply to other financial firms to provide services honestly, fairly and efficiently.

The government said it had worked with the market regulator, the Australian Securities and Investments Commission – which has pushed for strong regulation of the sector – to ensure the framework unveiled on Thursday was “fit for purpose”.

Under the policy, businesses that provide certain types of digital assets (stablecoins and “wrapped tokens”) won’t be required to hold a financial markets’ licence – a decision likely to be welcomed by crypto exchanges operating in this part of the market.

The government also vowed to continue trying to counter “de-banking”, by which banks deny their services to some tech-based rivals – a long-running issue that’s been a particular concern in the crypto sector. De-banking could have a “devastating” impact on affected businesses, while stifling competition and innovation in the financial services sector, it said.

The world’s largest cryptocurrency, Bitcoin, surged late last year in response to Trump’s November election win, breaking through $US100,000 ($158,000) in December as speculators piled into the volatile asset. Since late January, however, Bitcoin has been caught up in a wider decline in financial market sentiment, and it was trading at about $US85,900 on Thursday.

On Thursday, the government also released a detailed review that found many young investors, in particular, were not aware of the tax implications of their crypto investing, highlighting the need for better communication with this cohort.

The Board of Taxation was tasked with reviewing the tax treatment of digital assets in Australia and whether changes to tax laws were needed. It recommended against introducing new legislation, but said some taxpayers needed more guidance from the Australian Tax Office about the information they should disclose to the ATO.

It said there was a particular lack of awareness about the tax treatment of crypto assets among retail investors, who were often relatively young, which could lead to poor compliance.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.