Australian Fintech Industry Approves: Legislation Passed on AML for Cryptocurrencies

FinTech Australia, the advocacy group for Australia’s burgeoning Fintech industry, has given its seal of approval following the Australian Parliament’s passage of Anti-Money Laundering (AML) legislation.  According to Fintech leaders, the governmental approach regarding cryptocurrencies, such as Bitcoin, will position Australia as a world leader in digital currencies and Blockchain utilization. The digital currency legislation passage comes soon after the Australian Stock Exchange announced it was going to use Blockchain to manage its clearing and settlement system for equity transactions.

In October, Parliament recognized cryptocurrencies as the equivalent to money for the purposes of goods and services tax and thus removed the potential for double taxation. Australia is one of the only countries in the world that has taken this approach. The other being Japan. The US, in contrast, has legislation pending in the US Senate Judiciary Committee that will completely undermine cryptocurrencies and is evident of a lack of sophistication on the part of elected officials.

Several prominent members of the Australian Fintech community lauded the language of the bill.

FlashFX chief enabling officer and FinTech Australia Blockchain Working Group Co-lead Nicolas Steiger said this would enable further growth of the digital currency industry in Australia and called the legislation a “milestone achievement that will allow for an equal regulatory playing field and should only solidify consumer trust in this new industry.”

Scott Williamson, CEO of biometric identity verification solutions company PRIMEiD  added that digital currencies are the wave of the future for payment systems, but they also have the potential to provide a powerful new tool for criminals.

“This new regulation, supported by innovative Regtech firms, will significantly mitigate the risks and allow the digital currency industry to continue to excel,” said Williamson

Leigh Travers, CEO of ICO and Blockchain consultancy DigitalX and Deputy Chair of the Australian Digital Commerce Association (ADCA), called the legislation the reform his group has been calling for;

“ We have been delighted to work with the Attorney-General’s Department and AUSTRAC on a sensible regime to provide business certainty and confidence to consumers.”

Sam Lee, the CEO of Blockchain Global explained that as a venture builder in the Blockchain industry, they welcome regulatory clarity to uplift the investability of Blockchain enabled startups in Australia.

Paul McKenzie, Operations Manager of digital currency exchange shared;

“ applaud the Australian Government’s update to the Anti-Money Laundering and Counter-Terrorism Financing Bill, further legitimising cryptocurrencies. This will stamp out fraud and allow innovation to flourish; a bold move that will benefit Australian’s for years to come.”

Danielle Szetho, CEO of Fintech industry association FinTech Australia, said the legislation’s approval reaffirmed Australia’s ability to develop sensible and orderly fintech-friendly regulation, which both protected consumers and society and allowed new industries to thrive.

“The Australian Government has worked closely with the nation’s fintech industry over some time in developing and drafting this legislation. Now it is in place, the legislation will help bring further legitimacy to exchanges operating in Australia, unlocking the benefits of digital currency usage and trading whilst ensuring this is done in an appropriate way. Overall, this development is the latest in a series of important steps that will ensure Australia’s blockchain and digital currency industry remains one of the most highly regarded and vibrant in the world.”

Under the legislation, digital currency exchange providers will be required to:

  • enrol with the Australian Transaction Reports and Analysis Centre (AUSTRAC) and register on the Digital Currency Exchange Register maintained by AUSTRAC

  • adopt and maintain a program to identify, mitigate and manage the money laundering and terrorism financing risks they may face

  • identify and verify the identities of their customers

  • report suspicious matters, international transactions and transactions involving physical currency that exceeds $10,000 or more (or foreign equivalent) to AUSTRAC, and

  • keep certain records related to transactions, customer identification and their program for seven years.

 Two Explanatory Memos are below.

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