What is the Cryptocurrency Bill?
Australian Liberal Politician Andrew Bragg wants to prepare Australia for a cryptocurrency bill the widespread use of China’s central bank digital currency (CBDC), the digital yuan.
China’s Digital Yuan and Its Potential Impact on Australia
On Monday, a draft of the digital assets Bill was introduced, being a Bill for an Act to provide for the regulation of activities relating to digital assets and reporting by certain banks that facilitate digital Yuan, and for related purposes.
In detail, the objects of the Act are:
(a) to provide an effective regulatory framework for digital asset exchanges, digital asset custody services and the issuing of stablecoins, that protects consumers and promotes investment in Australia; and
(b) to provide for the reporting of information by certain banks that facilitate the use or availability of digital Yuan in Australia; and
(c) to provide for additional duties of the Parliamentary Joint Committee on Corporations and Financial Services relating to this Act and the regulation of activities relating to digital assets and digital Yuan.
Essentially Bragg’s Bill proposed strict reporting requirements for those Australian banks that may use the digital yuan in Australia, citing that the use of cryptocurrency is on the rise and the lack of regulation in the sector could threaten Australia’s national security. The Bill identifies seven Chinese banks, including the Agricultural Bank of China and the Bank of China, that have branches in Australia and can potentially facilitate the use of a digital yuan in the country.
“The Chinese government is piloting what they call the digital yuan, which is a digital form of currency, and they’re currently trialling that outside of China as well, with the UAE [United Arab Emirates], Hong Kong and Thailand,” he told RN Breakfast host Patricia Karvelas on Monday.
“That currency, if it became widespread in the Pacific, or even within Australia, would give the Chinese state enormous power, economic and strategic power that it doesn’t have today.”
“So I think we need to be prepared for that. We need to know more about this digital currency, so the bill establishes reporting requirements in that regard.”
Thus, Australia must be prepared for the widespread use of a digital Yuan within Australia.
How the Cryptocurrency Bill Proposes to Protect Australian Consumers
In recent times, the Labor government led by Prime Minister Anthony Albanese, has introduced token mapping, seeking to become the first nation to “token map” the cryptocurrency digital assets sector as the government seeks to provide greater protections for Australian consumers.
We have an article on that here.
The RBA is also weighing in on the race of exploring the use cases of central bank digital currencies (CBDCs) in the nation.
We have an article on that here.
Bragg also wants to set up licensing frameworks for crypto exchanges, custody services as well as issuers of stablecoins – which are cryptocurrencies pegged to the value of other assets like the U.S. dollar or gold, through his proposed bill.
Such a bill was needed due to “inaction” from an “indolent” government that believes cryptocurrency is a “scam” and is “only responsive to vested interests,” Bragg said in a press release. The new government is also “starting its work from scratch” after disregarding the “enormous progress” made by the previous Coalition Government on crypto regulation, according to Bragg.
Private member bills have a slim chance of getting through parliamentary procedure, but Bragg told RN Breakfast he is an “optimist” and that he would talk to his colleagues in the Senate “to see if they are open to supporting” his proposed rules.
The draft bill is open for community feedback until Oct. 31, 2022.
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