10 December 2021

Australian Federal Treasurer Josh Frydenberg has announced a digital payments and cryptocurrency asset “reform plan” in a speech on Wednesday.

The move comes as Australia progresses towards becoming a leading digital economy and has been described as an ‘enormous opportunity’.

“Our technology sector is already estimated to be generating $167 billion in output and employing more than 850,000 Australians”, said the Treasurer.

The reform plan is aimed to protect consumers under a federal framework who use digital wallets, buy now pay later services, and also cryptocurrency investors.

The Government’s plan to legislate the industry is the largest reform to our country’s’ payments systems in a quarter of a century.

The Treasurer confirmed that the Commonwealth and Reserve Bank are currently working on the viability of a central cryptocurrency in Australia.

The global cryptocurrency sector is worth more than USD $2 trillion, with more than 220 million participants.

Closer to home, more than 800,000 Australians have transacted digital assets in the last three years, which is a 63% increase.

We are in the midst of a digital revolution, and Josh Frydenberg has vowed to make Australia a ‘world leader’ in cryptocurrency.

The Federal Government has set a vision for Australia to be a leading digital economy by 2030 and to capitalise on the convergence between finance and technology.

Under the Digital Economy Strategy, the government dedicated $1.2 billion towards the implementation of e-invoicing, updating business registers and establishing and expanding the Consumer Data Right.

Early next year, Josh Frydenberg intends to commence talks on a licensing framework that will regulate fintech’s, digital payments, BNPL and cryptocurrency which is expected to be finalised by the end of 2022.

“Given the pace of change and those leading it, if we do not reform the current framework it will be Silicon Valley that determines the future of our payments system,” said the Treasurer.   

Qoin Governor Tony Wiese said: “This was great news for the Qoin community as it will give certainty to our project and to our merchants. It gives us confidence and will protect consumers.”

Westpac chief executive Peter King believed that this was good news for the wider industry.   

“Modernising our payments infrastructure and its regulation, including cryptocurrency regulation, will strengthen our financial system and improve protections for customers,” he said.

Specifically, on cryptocurrency, the government will explore a custody regime that would protect consumers who trade on exchanges. The Board of Taxation will also be required to investigate how best to tax these digital assets.

The detailed payments and crypto reforms that have been announced will place Australia in a strong position and among a handful of lead countries in the world.