Australian Liberal Senator Andrew Bragg kicked off the Australia Blockchain Week conference with a blistering legislative proposal that he hopes will lay the groundwork for a new digital asset ecosystem.
The proposed Digital Services Act (DSA) legislative package calls for reforms in crypto market licensing, custody, Decentralized Autonomous Organizations (DAOs), debunking and taxes. Senator Bragg said in his address to the conference that he hopes the legislation in the act will “protect (crypto) consumers against malicious operators.”
Senator Bragg outlined the four main pillars that are guided by the DSA. He explained that the DSA would be technically neutral, have broad and flexible principles, would be regulated by a minister rather than a bureaucratic agency, and would use government resources and personnel. In his view, such guidance would help show Australia that the country is ready to play a bigger role in the crypto industry.
“It will show that Australia is open for business and that things are clear and clear.”
The senator challenged various branches of government to take the DAO too seriously. He called them “a potential threat to the tax base” under existing rules.
According to statistics published by the Parliament of Australia, company tax is the second largest source of revenue for the government behind income tax, however, DAOs are not taxed as companies.
To that, Senator Bragg said his country’s “reliance on the company tax is untenable” if a growing number of organizations become the DAO. Consequently, the DSA will entrust the government with the task of creating a framework for creating standards without violating the core principles of the DAO.
The standards would essentially ensure that consumers have access to audit, assurance and disclosure services from DAOs, which help them differentiate between retail and wholesale organizations. Senator Bragg called on the Treasury to address those issues, as well as “leave the field open for the DAO to live up to its name.”
Building on Australia’s crypto hub ambitions: to address @BlockchainAus.https://t.co/j79BpbGJKI pic.twitter.com/8bf7Sqjut4
— Senator Andrew Bragg (@ajamesbragg) 20 March 2022
Michael Harris, head of corporate development at Australian crypto exchange Swyftx, is in favor of the government setting high standards for the domestic crypto industry. He told Cointelegraph today that exchanges have nothing to fear about high standards because “most Australian exchanges already take their duty of care to customers very seriously.”
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Harris said that the land below should lead the developed world in crypto regulation due to its high rate of adoption. A poll by Pollster Finder found that 22.9% of Australians owned crypto from October to December 2021. Harris continued to say:
“We see this as a significant step forward. Australia has the largest crypto adoption rate in the developed world. It makes complete sense for us to take the lead in regulation.”
One of the major concerns in the crypto market recently is its use by individuals and nations to circumvent global economic sanctions. There is currently a debate in the US Senate about whether the Russian government will be able to keep its military campaign in Ukraine funded with the help of cryptocurrencies.
Blockchain tracking firm Elliptic found on March 15 that some sanctioned individuals were doing crypto, but Senator Bragg said the Australian government was powerless under existing digital currency exchange (DCE) laws to serve vengeance on such criminals. The DCE’s lack of jurisdiction served as the impetus to create new proposals to prevent sanctioned individuals from taking advantage of the loose crypto laws, adding:
“The reality is that we do not live in a liberal nirvana. We cannot have regulatory arbitration.”
