The new legislative package will address issues in crypto custody, taxation, and DAO operations in order to protect consumers against bad actors in the space.
Australian Liberal Senator Andrew Bragg opened the Australia Blockchain Week conference with a bombshell legislative proposal that he hopes will lay the groundwork for a new Digital Asset ecosystem down under.
The proposed Digital Services Act (DSA) legislative package calls for reforms in crypto market licensing, custody, decentralized autonomous organizations (DAOs), debanking, and taxes. Senator Bragg said in his address at the conference that he expects the legislation in the Act to “protect (crypto) consumers against malicious operators.”
Senator Bragg outlined the four main pillars that the DSA is guided by. He explained that the DSA would be technologically neutral, have broad and flexible principles, be regulated by a Minister rather than a bureaucratic agency, and use government resources and personnel. In his view, such guidance will help Australia show that the country is ready to take a greater role in the crypto industry.
“This will show Australia is open for business and things are clear and clean.”
The Senator also took on DAO’s, challenging various branches of the government to take them seriously. He went as far as calling them “an existential threat to the tax base” under current rules.
According to data published by the Parliament of Australia, the company tax accounts for the second-largest source of revenue for the government behind income tax, however, DAOs are not taxed as companies.
To that, Senator Bragg said that his country’s “reliance on company tax is unsustainable” if an increasing number of organizations become a DAO. As a result, the DSA would task the government with creating a framework for creating standards for DAOs without stifling their core principles.
The standards would essentially ensure consumers have access to audit, assurance, and disclosure services from DAOs that help them distinguish between retail and wholesale organizations. Senator Bragg called for the Treasury to address those issues while also “leaving the field open for DAOs to continue to live up to their name.”
Head of corporate development at Australian crypto exchange Swyftx Michael Harris is in favor of the government instating higher standards for the domestic crypto industry. He told Cointelegraph today that exchanges have nothing to fear from higher standards because ”Most Australian exchanges already take their duty of care to customers very seriously.”
Harris added that the land down under should be leading the developed world in crypto regulation because of its high rate of adoption. A survey from pollster Finder found that 22.9% of Australians owned crypto from October to December 2021. Harris continued to state that:
“We see this as an important step forward. Australia has one of the largest crypto adoption rates in the developed world. It makes complete sense for us to lead on regulation.”
One of the major concerns in the crypto market lately is its use by individuals and nations to circumvent global economic sanctions. There is currently a debate raging in the US Senate about whether the Russian government is able to keep its military operation in Ukraine funded with the help of cryptocurrency.
Blockchain tracking firm Elliptic found on Mar. 15 that some sanctioned individuals are holding crypto, but Senator Bragg stated that the Aussie government was powerless under the current Digital Currency Exchange (DCE) laws to serve retribution on such offenders. The DCE’s lack of jurisdiction served as motivation for making the new proposals to prevent sanctioned individuals from taking advantage of lax crypto laws, adding:
“The reality is we don’t live in a libertarian nirvana. We cannot have regulatory arbitrage.”