Australia Drafts New Crypto Bill, Seeks to Regulate Stablecoins

Key Takeaways

  • Bill seeks to clamp down on the widespread usage of China’s CBDC-e-Yuan.
  • Senator Bragg said the Australian government must “put something on the table” to handle other CBDCs that are being introduced, he also added that Australia wouldn’t benefit from having a CBDC because “privacy issues cannot be managed.
  • Senator is looking to set up licensing frameworks for crypto exchanges, custody services, and issuers of stablecoins.

Australian Liberal Senator Andrew Bragg has released a draft bill to tackle the widespread usage of China’s central bank digital currency (CBDC), the e-Yuan, and the stablecoins.

The draft digital asset bill introduced on Monday proposes strict reporting requirements for financial institutions that could potentially make the digital yuan available for use in Australia.

Introducing the new bill, Senator Bragg said, “Australia must keep pace with the global race for regulation on digital assets because the parliament must lead legal reform” in this area.

He states that the Australian government must “put something on the table” to handle other CBDCs that are being introduced, he also added that Australia wouldn’t benefit from having a CBDC because “privacy issues cannot be managed.”

The bill titled “Digital Assets (Market Regulation) Bill 2022” identifies seven Chinese banks, such as the Agricultural Bank of China and the Bank of China, that have branches in Australia and can also potentially facilitate the use of a digital yuan in the country. 

The bill also set disclosure requirements for those designated banks, including reporting the number of Australian businesses that have accepted payments using China’s CBDC facilitated by the bank and the total amount of digital yuan held in digital wallets by Australian customers of the designated banks. 

As per the bill, individuals or companies that do not abide by the proposed regulation will face fines.

Senator Bragg points out that the bill’s necessity was owing to “inaction” from an “indolent” government that believes cryptocurrency is a “scam” and is “only responsive to vested interests.”

He had also expressed his interest in setting up licensing frameworks for crypto exchanges, custody services, and issuers of stablecoins.

Last month, the Reserve Bank of Australia (RBA) said in a statement that it would carry out one year-long pilot project to explore “innovative use cases and business models” for CBDC and to gain a better understanding of technological, legal, and regulatory considerations.

In August, the Australian Treasury Department said it would prioritize ‘token mapping’ work in 2022, which will help identify how crypto assets should be regulated.

Token mapping deals with uncovering the nature of digital asset tokens in Australia, such as charting the type of crypto asset, its underlying code, etc.

Saniya Raahath
Saniya Raahath

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