Regulation
Charting a path for cryptocurrency regulation in Australia is vital: Kraken
Cryptocurrency exchange Kraken has issued a warning about Australia’s late moves towards regulation, which could provide certainty for investors.
Kraken’s managing director for Australia, Jonathon Miller, says Australians love cryptocurrencies, with nearly one in four Australians owning cryptocurrencies.
This is the highest adoption rate globally.
“Despite this rapid embrace of blockchain technology, we have been behind the curve in implementing a regulatory framework that will govern digital assets for the long term,” Miller said.
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“While interest in digital assets in Australia and globally is recovering, the lack of clear regulation could see us fall behind major financial markets such as Singapore, Europe and the UK.
“Regulation, when done correctly, provides entrepreneurs and established industry players with a rule book to refer to when making decisions, gives investors a better idea of which crypto projects to invest in, and protects consumers from unscrupulous practices. “
Shaping the regulation of digital assets
So, what constitutes good regulation?
“Earlier this year, Kraken was invited to collaborate with other leading experts in the Australian blockchain and digital assets sector to develop a series of recommendations on how a regulatory framework could work,” Miller said.
“Here are some of the key takeaways from this work (at the Custody and Asset Management Roundtable) that form the basis of what Blockchain Australia will support as we look to develop a fit-for-purpose regulatory framework.
Solving Crypto Asset Debanking
“One of the most frustrating things individual investors face is the unwarranted rejection of services by traditional financial operators, and this also affects trust in the business side of the digital asset industry,” Miller said.
“Blockchain Australia recommends creating a standard framework for banks to assess risks when dealing with cryptocurrencies, inspired by successful models such as Hong Kong, in order to bring greater trust and certainty to transactions between cryptocurrencies and fiat currencies.”
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Sharing information and mitigating scams
Miller said that to combat scams, information sharing paths between banks, digital asset exchanges (like Kraken) and regulatory bodies need to be improved.
“Establishing industry-wide standards for scam prevention through the use of advanced analytics helps protect consumers and encourage more secure crypto transactions,” he said.
Create a clear token taxonomy
“Crypto” is an abbreviation for a very broad spectrum of thousands of assets.
And Miller said developing a clear token taxonomy to distinguish between various types of digital assets would go a long way in providing clarity to help investors make informed decisions as they navigate the cryptocurrency market with greater confidence.
Consumer education programs
“As an industry, we have a lot more educational work to do than just highlighting how to avoid scams,” Miller said
“Launching comprehensive consumer education programs covering all aspects of digital assets shouldn’t just be an aspiration, it should be table stakes for any cryptocurrency business.
“These resources must be accessible to a broader audience base, including stakeholders, institutional audiences and individual investors.
“By developing a central hub for accurate educational materials and aligning them with industry needs, we can close the knowledge gap and drive greater adoption of cryptocurrencies.”
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Simplify the tax treatment of cryptoassets
Miller said the adoption of cryptocurrencies has been held back by people not understanding tax obligations when trading or transacting with cryptocurrencies.
“Simplifying tax reporting and compliance processes for cryptocurrencies will go a long way in setting the expectations of the crypto community,” he said.
“Clearer tax classifications and a standardized reporting process would make it easier for everyone to fulfill their tax obligations without confusion.”
Custody
“We support clear custody regulation, focusing on regulators who have direct control over consumer assets,” Miller said.
“A flexible and adaptable regulatory approach that distinguishes between direct and indirect control of assets will ensure that custody practices keep pace with technological advances and continue to effectively protect consumer assets.
A path forward
Miller said the blockchain industry, despite its growing popularity, is still in its infancy, especially when compared to traditional finance.
“Regulation that protects consumers while enabling market competition and innovation is a difficult balance, but it will be vital as the economy becomes even more digital,” he said.
“Slow action or the wrong approach by politicians could risk capital flight and see Australia lose leadership in a market that is set to be worth $3 trillion in global trade by 2030. “There is a lot at stake – and Kraken is proud to be a part of it.” to help the industry grow in Australia.
This content first appeared on stockhead.com.au
The views, information or opinions expressed in this article are solely those of the interviewee and do not represent the opinions of Stock head. Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.
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Originally published as Charting a path for cryptocurrency regulation in Australia is vital: Kraken