Australia’s Financial Regulators Endorse Treasurer’s Plan for Crypto, Payment Reform

The Council of Financial Regulators released on Thursday (Dec. 16) its quarterly statement, where it endorsed the treasurer’s plans for a major reform in the payment system, including potential regulation of crypto-assets.

The Council is the coordinating body for Australia’s main financial regulatory agencies. There are four members: the Australian Prudential Regulation Authority (APRA), the Australian Securities and Investments Commission (ASIC), the Australian Treasury and the Reserve Bank of Australia.

The Council discussed the treasurer’s announcement earlier this month of the biggest overhaul of the payment system in the last 25 years, including developments with technology, financial and crypto-asset regulation. For this purpose, the Council decided to create a new Working Group on the Regulation of the Crypto-Ecosystem, which will help to progress some of the crypto-asset reform.

Additionally, the Council formed a separate working group that will focus on de-banking in the FinTech, crypto-asset and remittance sector. This group will include the Council agencies, along with the Australian Competition and Consumer Commission, the Australian Transaction Reports and Analysis Centre and the Department of Home Affairs.

On Dec. 8, the government of Australia announced a series of reforms to modernize the rules governing the payment system, including new forms of payments like digital wallets and buy now, pay later (BNPL). These reforms aim to regulate not only the traditional payment system, but also digital assets like cryptocurrencies, tokens and stablecoins. The government will also investigate the feasibility of creating a central bank digital currency (CBDC), and will consult with the industry on the appropriate regulatory structure for decentralized autonomous organizations (DAOs).

These reforms will be divided into two groups, with the most urgent ones being implemented in the first half of 2022 and the remainder by the end of 2022.