Australia’s authorities are preparing to update their payment legislation in the biggest reform of the sector in more than two decades. These changes will allow for the expansion of the regulatory framework to include new payment processors online, including those that deal with cryptocurrencies.
Reuters reported that the government will start consultations in 2022 on the establishment a licensing framework for cryptocurrency exchanges and regulation of platforms that hold digital assets on behalf clients. Canberra is also interested in exploring the possibility of a central bank digital money ( CBDC), issued by the Reserve Bank of Australia.
Non-cash transactions have seen a spike in the Covid-19 pandemic, as more Australians are turning to online options. Nearly half of them use their smartphones to pay, while crypto transactions have increased 63% in 2021.
Australia’s plan for broadening its payment regulations includes online transaction processors like Apple and Google, as well as providers that allow you to buy-now-pay later such as Afterpay. Their unsupervised operations in Australia will be stopped. Federal Treasurer Josh Frydenberg spoke out about the necessity of the amendments.
Silicon Valley will decide the future of our payments system if we don’t reform the existing framework. Australia must maintain its sovereignty over the payment system.
Google and Apple have not commented on the announcement. However, Afterpay spokespersons were quoted as saying that Afterpay supports any approach that considers consumer benefits from Afterpay’s innovation and competition. Reuters reported that the platform agreed to a buyout by Jack Dorsey, founder of Twitter’s payments firm Square.
Australia’s decision comes as a number other large economies are making efforts to establish their financial innovation regulations, including cryptocurrency. The report indicates that Australia, unlike China or India is planning to adopt a more inclusive approach to cryptocurrencies, similar to the United States.