The Australian Senate Select Committee inquiry into FinTech and RegTech has released their interim report. Over 180 submissions (plus further supplementary submissions) were made to the Committee (including the writer's submission and supplementary submission) and a number of public hearings were held, which the writer was honoured to have appeared at. The Committee members were highly engaged in those public hearings, the transcripts of which are available on Hansard.
The Interim Report has a wealth of valuable observations and recommendations, and in this update we will focus on what was reported in the Interim Report concerning blockchain matters:
6 pages of the report were dedicated solely to "Blockchain and distributed ledger technologies, noting that the potential is estimated to be at B$175 annually within five years and $3 trillion by 2030;
The Australian Government's National Blockchain Roadmap and CSIRO work done by their data and digital unit Data61 was highlighted, as well as the economic value that the technology brings to the financial sector;
The legacy issue of the tax treatment of funds raised by Initial Coin Offerings was mentioned, as Power Ledger's submissions focused on this point as well as the Blockchain Australia and RMIT report proposing tax changes to help support digital currency use in Australia, and the question of regulation of digital currency;
The UK initiative to build a prototype mortgage transaction distributed ledger project was mentioned;
The potential for government property data to be stored on a DLT system was noted and discussed by the ASX.
The ASX gave evidence that distributed ledgers have potential to 'build the next generation of financial services and reduce costs for consumers' but ComputerShare submitted that the system would increase the monopoly powers of the ASX;
The Commonwealth Bank's Innovation Lab Bond-i bond was given a shout out;
The CEO of the New Payments Platform, Mr Adrian Lovney, comments that use-cases for NPP include blockchain functionality but due to innovative payment tools being perceived by those unfamiliar with these innovations as riskier and hence lead to less competition in the space.
We will look more closely at the recommendations in the Interim Report soon.
The committee will continue to consider the previous submissions, having extended its final reporting date until 16 April 2021.
A copy of the full 281 page report can be found here.