As part of the greatest reform of its A$650 billion-a-day ($463 billion) payments industry in a quarter-century, Australia will create a licencing structure for cryptocurrency exchanges and contemplate creating a retail central bank digital currency.
The country would also widen its payment regulations to include online transaction providers such as Apple Inc and Alphabet Inc’s Google, as well as buy-now-pay-later (BNPL) providers such as Afterpay Ltd, putting an end to their ability to operate without direct supervision.
“If we do not modify the current framework, Silicon Valley will determine the future of our payment system,” Treasury Secretary Josh Frydenberg said in a speech. “Australia must maintain control over our financial system.”
Australia’s conservative government is leading worldwide efforts to rein in giant internet corporations, while taking a more inclusive stance than countries such as India and China, which have criminalised Bitcoin.
During the epidemic, as people’s life migrated online, the use of bitcoin and non-cash payments has skyrocketed in Australia.
According to government data, around 55 million non-cash payments are made in Australia every day, with nearly half of the population using their phones to make payments. In comparison to last year, the number of Australians dealing in bitcoin has increased by 63 percent this year.
Frydenberg stated that the government would begin consultations on developing a licencing framework for digital exchanges in early 2022, allowing customers to buy and sell crypto assets in a controlled atmosphere.
Frydenberg noted that the government would also consult on regulating enterprises that store crypto assets on behalf of consumers, as well as the feasibility of a central bank digital currency.
A spokesperson for Afterpay, which has agreed to a buyout from 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”.
Apple declined to comment while Google had no immediate comment.
Gerard Brody, chief executive of the Consumer Action Law Centre, said regulating crypto exchanges would recognise those entities “are now holding significant sums of peoples` money and investments”.
Regulating BNPL companies would “address the significant risk of debt and financial stress associated with these products,” Brody added in a statement.