After Coinbase's "blockbuster US listing" stopped the financial world in its tracks, this "landmark moment" has sparked an important conversation about the risk Australia runs by not having more supportive guidance and clearer regulatory parameters in place for digital assets and blockchain technology.
As the listing "draws global investor attention to bitcoin and the decentralised blockchain technology that facilitates it", the fears are that Australia is falling behind the rest of the world. Not only that, but there have also been various reports of Australia's "regulatory haziness and the lack of guidance" causing "several cutting-edge entrepreneurs [to start] going elsewhere." Reportedly:
Regulatory uncertainty about digital assets in Australia is forcing crypto entrepreneurs to depart for jurisdictions – such as Britain, Germany and Singapore– with more supportive policies on technologies that power bitcoin and other cryptocurrencies.
In the UK, the FCA has set out clear categories of tokens that sit outside securities regulation and specified those that are subject to regulation. Regulated tokens include “security tokens” that carry ownership rights or an entitlement to passive income or revenue sharing and “e-money tokens”, which are analogous to a non-cash payment facility in Australia.
In response to allegations of not enough being done by Australia, Liberal Senator Andrew Bragg recently commented:
Some banks feel there is not enough of a policy framework to give them the confidence to bank these companies and that is something I am quite keen for us to fix. As a forward-looking country, we don’t want Australia to be a backwater. We want these products and innovations to happen here.
I am concerned that we are losing opportunities, and I encourage people [thinking about leaving Australia] to wait for the outcome of the [Senate Select Committee on FinTech's] review.
The Senate Select Committee on Fintech is in the process of developing a plan for Australia to combat some of this uncertainty and haziness surrounding how digital assets should be treated. However, with the final report estimated to be released in October this year it also adds fuel to the now burning question, is this too little too late?