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Australia has been experiencing the transformation that is brought about by cryptocurrencies just like the rest of the world. Cryptocurrencies have taken over the digital world by storm and it seems that the trend is not going to stop any time soon. While cryptocurrencies are by nature decentralized and free from institutional regulation, governments have sought to regulate this sector considering the relevance of these currencies. This might raise questions especially in the cryptocurrency wold but as the Australian government has shown, it can be possible to have institutional regulations that foster cryptocurrencies. Some of the steps taken by the Australian governments are particularly laudable as they have been supportive in nature.
The nature of the Australian market
There has been a huge surge in the adoption of cryptocurrency in Australia. This market is among the top 15 markets when it comes to Bitcoin trading. While Australia might not currently have the highest volumes of trade, there has been positive involvement of the government.
The government has for instance already licensed three exchanges in the country. Not only that, but the government has also created a regulation that touches on the nature of the trade with a couple of compliance measures being put in place. The Australian Transaction Reports and Analysis Centre (AUSTRAC), has been put in charge of handling the issues of licensing and compliance.
The involvement of the government is not without cause. Bodies like AUSTRAC are tasked with combating money laundering and encouraging fair trade. According to AUSTRAC CEO, the body was created with the vision of strengthening the cryptocurrency market through progressive regulations. In short, Australia is trying to promote the industry while protecting citizens from fraud.
Australia has demonstrated leadership
Australia is not just seeking to regulate exchanges though, the government hopes that their efforts will allow for a vibrant cryptocurrency market. Australia is the only other country alongside Japan that had recognized Bitcoin as legal tender by the end of 2017. Cryptocurrency trading is thus protected by the law in Australia.
In terms of taxation, some commendable laws have also been put in place. A double taxation law that was in effect in 2017 was repealed in order to remove the unnecessary burden put on the industry by the government. As for the ICOs, Australian has sought to chart its own path in the industry. Compared to other countries, Australia has a regime that is not just reasonable but supports growth. China, for instance, decided to completely ban cryptocurrency and the USA has been heavily critical of ICOs. In Australia, however, the regulatory authorities opted to give normal legal treatment where the already established laws took precedence in guiding the regulation of ICOs.
The market response
As expected, the regulations put in place were bound to be analyzed by stakeholders in the industry. The general response has been positive and stakeholders have welcomed the steps taken by Australian authorities. Compared to other places in the world, the Australian authorities have demonstrated that they are willing to take the time to analyze the markets and listen to the opinions of stakeholders. This has allowed for a progressive regulatory regime in the country.
Regulation is necessary for the future
There have been concerns that regulation only works for the interests of the government. While it is true that the government will end up having some control over the otherwise decentralized crypto market, the truth is that stakeholders in the industry will also benefit from this regulation.
Cryptocurrencies will continue taking a central role in online financial systems. It is thus only a matter of time before the effects of the digital currency start being felt in the general economy. Industry experts thus reckon that the leadership indicated by the Australian authorities is necessary for a working future cryptocurrency world.
The climate is right for regulation
In 2018, many major companies have already embraced cryptocurrency. It is no longer a fringe currency that is only used by a few tech enthusiasts online. With the attitudes of people shifting in favor of cryptocurrencies, it is only right that regulatory authorities step in and create a good environment for cryptocurrencies to prosper. While countries like Australia and others around the world are simply going for specific measures that are unique to their immediate needs, it will be necessary for wide-ranging regulations for the industry. The great thing is that the G20 countries are already working on the mechanisms for the cryptocurrency market. The adoption of comprehensive guidelines might thus happen in a few years to come.
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Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.