Australia could be a global blockchain leader

Australia has the potential to be a global leader in the nascent blockchain technology sector with the right regulatory and policy settings, according to Blockchain Australia.

In its submission to the Senate Select Committee on Australia as a Finance and Technology Centre, the industry body said it is not too late to transform Australia into a blockchain and cryptocurrency powerhouse.

But this will require implementing “policy settings that encourage investment and innovation” as well as the development of “a sound, mature regulatory framework”, the submission states.

More progressive jurisdictions have realised that old policy settings and regulations are not fit for purpose for emerging technologies such as blockchain. It is therefore critical that regulation be reformed to ensure it does not present an undue burden for industry, Blockchain Australia argued.

“Blockchain Australia’s overarching recommendation is to implement a coordinated and graduated approach to ensuring that a fit-for-purpose regulatory framework is developed that facilitates innovation and competition while enhancing consumer outcomes,” the submission states.

This would mean as a first step implementing immediate safe harbour provisions for crypto asset providers until guidance or legislation is introduced, it adds.

Blockchain Australia is also calling for greater regulatory guidance and engagement in the short term while a longer-term, fit-for-purpose legislative framework is developed.

Any regulatory regime should be principles-based, futureproof and supported by evidence, the organisation said. The submission warns that there is a risk that a regulatory regime may be technology neutral on paper, but in practice has the effect of discouraging the use of blockchain.

The submission also argues that current cryptocurrency sector settings are not neutral and are inhibiting adoption.

It advocates that the blockchain regulatory framework should build on and strengthen consumer protections, facilitate consultative cooperation between industry and government, and include a best practice financial advice approach. The submission also calls for closer industry engagement in the design of the regulatory settings.

Blockchain Australia was the successful tenderer in a recent RFT to provide Australian and global crypto market landscape and data to the Australian Securities and Investment Commission (ASIC).

These works will also include an analysis of the opportunities available in the crypto asset market in Australia, current trends and future projections for crypto assets, information on the top blockchain service providers and various other metrics.

Image credit: ©stock.adobe.com/au/sashkin