Crypto advocate Senator Andrew Bragg has launched his own digital assets legislation to Parliament

The architect of Australia’s first response to regulating digital assets in Australia has lost patience with the new government, issuing his own draft legislation in a bid to push Labor to act on the issue.

Liberal senator Andrew Bragg coauthored a landmark Senate Select Committee report into digital asset regulation last year, investigating issues such as regulation and consumer protection, the fintech terror of “debanking”, and the taxation of digital assets, setting our a legislative roadmap with 12 recommendations that were embraced by the former Coalition government.

Bragg argues that Australia is falling behind on consumer protection and investment promotion because on inaction by Labor.

Australia must keep pace with the global race for regulation of digital assets,” he said.

“Enormous progress was made under the previous Coalition Government. The Labor Government believes cryptocurrency is a “scam” and is starting its work from scratch.”

Senator Bragg said the bill does the following:

• Introduces licenses for:
  • Digital Asset Exchanges,
  • Digital Asset Custody services, and
  • Stablecoin Issuers:
    • This includes requirements for Australian or foreign currency to be held in reserve in an Australian bank and for frequent reporting.

• Establishes disclosure requirements for facilitators of the e-Yuan in Australia, as the e-Yuan is the first CBDC released by a central bank of a major economy.

Speaking to the Startup Daily show this week, Senator Bragg said that with benefit of hindsight, he’d have changed some his recommendations from the senate report, but added that it was a fast-moving space and now there are new emerging threats, such as the e-Yuan.

Addressing the draft bill, he said it lays out how Australian consumers could be protected with capital requirements, key personnel tests, auditing and disclosure.

“With 20% of the population having owned some form of crypto, and the emergence of Central Bank Digital Currencies (CBDCs) issued by states that do not share our liberal-democratic values, the need for consumer protection in this space is urgent. It is not only a race for capital and investment in this industry. It is a race for our country’s future and economy,” Bragg said. 

“Waiting is not an option and Australian consumers are exposed to an unregulated market as we speak.”

Senator Bragg said Australians “face a gaping hole” between investment in a financial product is protected by regulation and endless advertising of crypto throughout the football finals.

He also points to the collapse of the algorithmic stablecoin Terra in the US, which cost investors an estimated $60 billion.

“Minimum reserve standards must be introduced to ensure that stablecoin issuers provide consumers with at least the minimum standard of consumer protection,” he said.

Bragg is also concerned China’s digital currency. e-Yuan, an aspect his October 2020 report didn’t foresee.

“The reason this Act specifically targets the e-Yuan is because it is the first CBDC to be issued by a major economy, and China’s financial influence is particularly relevant in our Pacific region,” he said.

“The e-Yuan may be a vastly more successful endeavour than China’s efforts to supplant the US dollar with the Yuan”, adding that in our own region, where access to banking and payment systems can be challenging and expensive, the it may prove to be very popular. 

Details on the digital assets paper are here.