RIYADH: Australia turned the heads of crypto enthusiasts on Wednesday with the country’s Treasurer Josh Frydenberg announcing a consultation on digital currency reforms.
In a speech in Melbourne, Frydenberg said the government is studying plans for a central bank digital currency, along with regulating the crypto market, as it seeks to reform how consumers and businesses in the country pay for goods and services.
The government will also consult on a digital version of cash that will be universally accessible and consider a license framework that allows crypto transactions in a regulated environment.
The Australian government expects to receive advice on both by the end of 2022, Bloomberg reported.
“If we do not reform the current framework, it will be Silicon Valley that determines the future of our payments system,” Frydenberg said in the speech. “These are significant shifts which we need to be in front of.”
Reacting to the speech, Mikkel Morch, executive director at crypto/digital assets hedge fund ARK36 said: “Governments around the world are waking up to the reality that cryptocurrencies have already become an entrenched part of the global payments environment - and one that is preferred over the legacy systems by a growing number of individuals.
“After the recent EU crypto regulation proposal, Australia has now announced its working on a similar document - and it is to be expected that other major jurisdictions will follow suit.”
“Importantly, the scope of the regulation outlined by the Australian Treasurer doesn't seem to be overly restrictive. Clearly, then, the regulators recognise the immense economic and innovation potential of crypto and don't want to stifle it,” Morch added.
Edan Yago, the lead contributor to the Bitcoin DeFi protocol Sovryn commented that it is a “question of time” before all payments and financial transactions are digitised on public ledgers, adding: “The future of money and finance is borderless and digital.”
India is considering appointing a capital markets regulator to oversee cryptocurrencies, as authorities look to classify them as financial assets, Bloomberg reported.
Prime Minister Narendra Modi’s government, which is planning to introduce legislation in the ongoing Parliament session, will give cryptocurrency holders a deadline to declare their assets and fulfil any new rules.
The bill will likely use the term crypto assets instead of cryptocurrency and will not refer to the central bank's plan to create its own digital currency, according to people with knowledge of the matter.
Violators can be fined up to 200 million rupees ($2.7 million) or imprisoned for a year and a half, according to the proposals.
The government may also consider setting a minimum investment level for crypto assets to protect small investors, Bloomberg News reported.
Bitcoin, the leading cryptocurrency in trading internationally, traded lower on Wednesday, falling by 2.18 percent to $50,126 at 5:37 p.m Riyadh time.
Ether, the second most traded cryptocurrency, traded at $4,401, up by 2.38 percent, according to data from Coindesk.