Following the growing interest in cryptocurrencies globally, the Senate’s Committee on Australia as a Technology and Financial Center has recommended that the country should establish favorable digital asset regulations to promote the development of the industry.
The committee said in a report published by Reuters today that the proposed laws should focus on issuing tax discounts for crypto trading and establishing a licensing regime for exchanges, among others.
According to the recommendations contained in the paper, the new regulations should provide clarity on how various digital currencies should be categorized to identify the relevant rules applicable to them.
The proposed regulatory clarity will also guide banks’ decisions when considering de-banking cryptocurrency clients because the indiscriminate closure of crypto investors’ accounts has hindered the growth of the industry.
Furthermore, an effective crypto taxation rule should be added to the regulation to enable traders to pay taxes on trading the asset class when they record clearly definable capital gain.
With appropriate digital asset regulations in place, Senator Andrew Bragg, the head of the committee, noted that Australian crypto traders will have more control of their financial destiny instead of endlessly depending on unnecessary intermediaries.
Bragg added that the recommended comprehensive crypto framework will enable Australia to compete with the United Kingdom, Singapore, and the U.S.
Earlier this year, Australia’s Finance Minister Jane Hume urged the government to allow new investors to gain exposure to cryptocurrencies by not imposing tighter regulations.
According to Hume, implementing a tighter legislative framework could hinder the growth of the industry, adding that the government needs to support citizens: “to be sensible enough to judge for themselves whether to put their hard-earned money into higher-risk assets.”
Irrespective of the risk associated with crypto investments that resulted in Australians losing $25 million to scammers in the first half of the year, Hume stated that the government should not stand in the way of investors looking to gain exposure to the asset class.
Australian cryptocurrency adoption has been impressive in 2021, with popular researcher finder.com.au reporting that a sixth of Australians now own cryptocurrencies valued at A$8 billion ($6 billion).
The surge comes as several institutional investors continue to indicate interest in digital currencies and as many consider the asset class, especially Bitcoin (BTC), as a store of value.