The Australian government has released a report that highlights obstacles within its economy and makes recommendations for regulatory guidance that may possibly nurture digital currency growth.
“We must ensure that our economy is agile enough to help us reap the opportunities that arise from disruptive technology. We must also change our culture to recognise that failure can be a stepping stone to success and that we can all learn through our experiences,” said Member of Parliament Michael McCormack.
First, the Australian government has made a recommendation for an amendment to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 that would allow the Australian Transaction Reports and Analysis Centre to regulate businesses that use digital currencies in order to combat anti-money laundering (AML) and counter-terrorism financing (CTF).
The Australian government explains that it has taken the same approach that countries such as the United States, United Kingdom, and Canada have taken regarding digital currency businesses because it will facilitate innovation and follow guidance issued by the Financial Action Task Force – the international regulator for preventing money laundering, terrorism financing, and other dangers that hinder the world’s financial system.
“Internationally, it is considered that the extension of AML/CTF regulation to include convertible digital currency exchanges would encourage innovation and investment by ensuring service providers have greater certainty and security in their dealings with digital currency businesses, while reducing the money laundering and terrorism financing risks associated with this emerging technology.”
The recommendation for amendment comes after an April 2016 statutory review of the Act by the Australian Ministry of Justice, which recommended that the country extend AML/CTF regulations to digital currency transactions.
Furthermore, the recently released report has recommended that digital currencies should be exempt from double taxation when used to purchase goods and services:
“The Government is working with the FinTech Advisory Group on options to reform the current GST treatment of digital currencies and released a consultation paper for public consideration as part of the 2016-17 Budget. Any change to the GST treatment of digital currencies is subject to formal state and territory agreement.”
This recommendation is consistent with a previous endorsement published in March 2016.
The Australian government also revealed it will consider recommendations for AML/CTF and GST (goods and services tax) treatment of digital currencies from its newly formed FinTech Advisory Group – an assembly to “ensure Australia has an internationally competitive environment for FinTech and can attract international innovators to Australia.”