- B Vrettos and M Bacina
The Senator for Blockchain?
Updated: Oct 6, 2021
Senator Andrew Bragg a highly anticipated speaker at the recent NFT Fest, has once again sent a strong message of support for the regulation of digital assets in Australia. In opening the event, Sen. Bragg addressed his hopes of positioning Australia as a 'crypto hub' with robust policy guided by three key objectives: consumer protection, investor promotion and market competition.
Bragg explained the reasoning behind the extended timeframe for the Select Committee on Australia as a Technology and Financial Centre (Committee), namely that more time was needed to accurately:-
Assess the opportunities and threats under digital assets constituting an 'unique form of property right'; and
Understand how digital assets could fall under a more clear, contiguous and flexible policy framework.
After examining almost 100 submissions, chairing three public hearings and holding 6 months of inquiries in the midst of many global developments, Sen. Bragg said:
While [the] window is closing every day, I do still believe Australia can be one of the biggest players in the game
The policy, which will be set out in a plan provided by the end of October, will look to strike:
a balance between bringing digital assets into the regulated world while preserving their dynamism
Sen. Bragg detailed how eyes were being cast overseas to model an appropriate regulatory framework to capture the potential for the sector. Specifically, Singapore is a standout and Australia will be aiming for a framework "at least as good as Singapore." In quick succession, Bragg indicated that he would recommend a licensing regime for consumer protection in relation to digital asset exchanges and that comparing Singapore and the UK to Australia's AUSTRAC lightweight registration process there is a clear need to "ramp up and repurpose regulation to combat the very low threshold" to the entry of bad actors, a reference to the fact that AUSTRAC registration does not involve any qualitative assessment of the strength of a digital currency exchange registering, but which is often touted by exchanges as an indication of strength or endorsement.
In looking overseas, Bragg reiterated that
For people who work tirelessly in this space, I understand it would be frustrating to be at the helm of what will likely be one of our biggest industries, and have politicians not taking it seriously enough or not investing the attention it deserves ... [y]ou have taken risks to advance your industry. You have delivered new choices and new competition for Australians. Next month, I will take a risk for you and set out a clear plan for digital assets
In closing Sen. Bragg also highlighted that this pursuit was not to be done at the expense of environmental goals.
Sen. Bragg commented recently that "excluding any part of the economy from our next zero ambitions is a bad & lazy idea" and the digital asset industry should be no exception.
The energy debate surrounding proof of work based digital assets continues, specifically in relation to bitcoin mining. However, there are moves by Australian private actors such as Iris Energy to provide sustainable ways to continue developing the digital asset space. All of these efforts combined with adoption of blockchain networks that use less energy intensive mechanisms to process transactions will be necessary to ensure that demand from digital asset networks and mining operations do not "eat the grid".
The extent of the Committee's recommendations will be unveiled when the Committee's Report is released on 30 October 2021.