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Australia goes from crypto leader to lagger
Australia risks falling behind in the global crypto adoption race because its strict approach to regulation is driving businesses away to friendlier jurisdictions such as Singapore, Dubai, UK and Miami, according to crypto consultancy agency Clanz.
As the crypto phenomenon spreads across the globe, chief operating officer and co-founder of Clanz, Stuart Burnicle says, Australian regulations have not kept pace with its international peers.
Speaking to The Inside Adviser, Burnicle says he formerly regarded Australia as a leader in cryptocurrency. Places such as Singapore, Dubai, London and Miami are well ahead now, however, offering friendlier licensing frameworks and easier regulations for entrepreneurs.
“The recent budget was a disappointment,” Burnicle says. “These tax measures are no change from the current tax regulations. Classifying cryptocurrencies such as Bitcoin as an asset will mean investors will pay capital gains tax on realised profits.
“While the rest of the world advances, we are stepping sideways,” he continues. “Another example is the Australian token mapping exercise. The projected time for the Albanese Government to complete the token mapping exercise is three years too long. A clear roadmap and a timeframe for the regulation of crypto assets is needed.”
The Australia’s Prudential Regulation Authority’s detailed plan states consultation and drafting of a framework for crypto regulation will take place in 2023, and the introduction of clear regulatory standards will occur in 2024 and 2025. The crypto market will not be fully regulated before 2025.
According to the former CEO of industry body Blockchain Australia, Steve Vallas (pictured), the local crypto sector is largely unregulated, so a token mapping exercise to better understand the sector makes sense.
“The tricky balance here is trying to ensure there is appropriate consumer protection without stifling, or worse, extinguishing, all innovation,” Vallas told media recently.
Burnicle is not as confident saying there is a risk of losing business overseas if we cannot keep pace with international peers.
“We risk losing our best crypto projects to more accommodating overseas jurisdictions. There are so many businesses that have already moved offshore. A regulatory framework around AML/CTF & KYC, already exists and is providing protection to consumers,” he says.
“Europe, Dubai and the UK are pushing ahead of Australia with many start-ups leaving to setup shop. If we create a hostile tax environment or a difficult place for crypto entrepreneurs to do business we will get completely left behind.”
Burnicle believes Australia will see wider crypto adoption but will not lead the world in crypto regulation.
“We’re preparing for a generational change in global assets. ‘Difficulties in the crypto world’ makes a juicy headline for media outlets in the short term, but the truth is Bitcoin has continued to outperform Apple, the ASX, gold and the S&P500 for two straight years,” he says.
