Australia-based crypto companies are leading a move to request that the government create “innovation-friendly” regulations, adding that the existing regulations are not enough.
The suggestions were submitted in response to a call by Australia’s fintech committee, asking cryptocurrency industry participants to submit recommendations on how “cryptocurrency” and “blockchain” could be used to boost the country’s financial ecosystem.
Swyftx, an Australia-based exchange, noted that traditional banks in Australia have refused to bank digital assets, basing their reason on an “ill-advised notion” of a so-called “increased risk,” thereby preventing Australian consumers from freely accessing Cryptocurrency services.
It is, however, time for the government to put an end to these “unauthorized gatekeepers of the system” by providing “a clear regulatory regime” that prevents traditional banks from withholding services to digital asset service providers, especially not “at the expense of consumer confidence and protection.”
Swyftx added that this regulation should as well include robust registration and licensing requirements for digital asset service providers to satisfy both consumer and bank concerns of associated risks.
R3, an Australia-based enterprise software platform with blockchain roots, focused on the need for impartial regulation. The company suggested that digital asset regulations should align with requirements imposed on the same asset if in its traditional form, thereby following the principle of “same risk, same activity, same treatment.”
“The regulation should not create a scenario in which the same instrument in digital form is subject to heightened regulation from when it is in traditional form,” wrote R3.
Bitaroo acknowledged the need for Australia to follow El Salvador’s steps by recognizing Bitcoin as a foreign currency and that it comes with benefits.
Bitaroo wrote: “By recognizing Bitcoin as a foreign currency… Australia has a unique but rapidly diminishing opportunity to position itself as a global and forward-thinking leader in this space.” The exchange is of the opinion that Bitcoin can help prevent generation-to-generation poverty by allowing people to save, share and transfer value digitally without help from a traditional bank.
The call for comment regarding regulation remarkably follows the growing investor appetite for cryptocurrencies in Australia and globally. Recently, the country’s securities regulator reviewed the pros and cons of a Bitcoin ETF, suggesting that such a product might be a good fit for mainstream investors.