- J McGlynn and M Bacina
Australian Government to support "laissez faire" approach to digital currency regulation
On Thursday, Financial Services Minister Jane Hume, told the Stockbrokers and Financial Advisers Association annual conference that the Government rejects calls for undue restrictions on digital asset marketplaces, and she recognises the profound opportunity posed by digital currencies.
Speaking on the Federal Governments plans for a new influx of digital financial platforms, products and advice, reportedly, Hume:
gave the strongest indication yet of the government’s position on regulating digital assets, promising Australians it would not stand in the way of the free market - even for some of the more fringe-dwelling and volatile corners of the burgeoning sector.
The Senator's libertarian approach will be applauded by the young digital currency industry, with the Federal Government standing behind Australians and their freedom to sensibly choose how to spend their own money, even if that involves speculation, saying:
... while it is frustrating for investment professionals to watch, at some point we have to let people make their own decisions ... It’s about personal responsibility and common sense
I would like to make something clear: cryptocurrency is not a fad. It is an asset class that will grow in importance. If you want to invest in Dogecoin, I won’t stand in your way. Personal opportunity and personal responsibility are two sides of the same coin.
Labor repeats myths and fear
Unsurprisingly, the opposition criticised the approach, with Labor’s MP Stephen Jones, saying:
the government was encouraging crypto investors to “swim outside the flags”
The opposition position is critical of the Federal Governments approach, with the Australian Financial Review quoting unnamed people who continue to perpetuate long debunked myths around digital currencies, with one clearly ill informed individual saying
Crypto is not an asset class, it is a Ponzi scheme
Of course a Ponzi scheme is an arrangement where a scammer takes in funds and returns purported dividends using new investor money. The transparency of digital assets makes it simple to see they aren't a ponzi scheme.
MP Jones continued on a similar tangent, asserting:
If used for payments and transacting for goods, services and property, unregulated cryptocurrencies could open ‘massive loopholes for money-laundering and tax avoidance'
It is of course unfortunate that Mr Jones didn't elaborate on these concerns, given the armies of hard working professionals who have been toiling to ensure AML/CTF risks in digital currency are being managed, as well as clear reporting from Chainalysis showing that digital currency is the worst possible tool for money-laundering or tax avoidance.
We have sent a copy of the Chainalysis report to Mr Jones' office to help him get across this important area, and we can only hope that bipartisanship around this clearly growing and important area of innovation emerges and political point scoring is reduced.