Australia takes major step towards Crypto and Digital Assets Regulations

Paigambar Mohan Raj
Source: Pexels

Australian Senator Andrew Bragg kicked off the Australia Blockchain Week conference with a legislative proposal that he hopes will pave the way for a new Digital Asset ecosystem in Australia.

The Digital Services Act (DSA) legislation package proposes changes to crypto market licensing, custody, decentralized autonomous organizations (DAOs), debunking, and taxes.

The DSA will have four guiding points, said Senator Bragg. He emphasized that the DSA will be technologically neutral, operate under broad and flexible principles, be governed by a Minister rather than a bureaucratic body, and employ government resources and employees. Such guidelines, he believes, will assist Australia to demonstrate that it is ready to play a larger role in the crypto business.

Australia to tax DAO’s?

According to data given by the Australian Parliament, company tax is the government’s second-largest source of revenue after income tax; however, DAOs are not taxed as companies.

According to Senator Braggs, with the current rules, DAOs are

“an existential threat to the tax base”

The DSA would charge the government with developing a framework for developing DAO standards without suffocating its essential values. Consumers would have access to audit, assurance, and disclosure services from DAOs, which would assist them to discern between retail and wholesale businesses.

The Australian government is seeking comments on its plan to revamp licensing and custody arrangements for digital assets from businesses and individuals. Regulators all around the world are grappling with the rapid rise of digital assets, attempting to find a balance between encouraging technology innovation and limiting consumer dangers.

Between October and December 2021, 22.9 % of Australians owned cryptocurrency, according to a poll conducted by pollster Finder. According to Australia’s Taxation Office, more than 800,000 Australians have transacted with digital assets since 2018.

Senator Bragg stated during the conference that he expects the Act’s laws to

“protect customers from malicious operators.”