Digital revolution driving new payment regulation

The digital revolution in payments is driving the first major modernisation of the payment regulation in 25 years, says Treasurer Josh Frydenberg.

“There is a digital revolution occurring in our payments system and gone are the days of cheques, cash is in decline and now we have got buy now, pay later, digital wallets, digital currencies that are fast becoming the new norm,” Frydenberg tells Channel 7.

“Our regulatory system has not stayed up to date with those digital changes,” Frydenberg says.

“Indeed, it hasn’t changed very much in the last 25 years even though every single day in Australia there’s around 55 million cashless transactions worth about $650 billion and more than 800,000 Australians have owned a form of cryptocurrency and there are 5 million plus buy now, pay later accounts.

“What we’re doing is we’re modernising the payment system, we’re broadening out the definition of the services and the products that can be regulated, we’re taking this area out of the shadows and bringing it into a considered regulatory framework which is world-leading.

Frydenberg says the new regime will focus on innovation.

“We want those businesses that are buying and selling cryptocurrencies to be properly licensed and that can provide greater certainty and security to those people who are transacting in that area.

He also confirmed the Reserve Bank will be looking into “the feasibility of introducing a central bank digital currency.”

Frydenberg is expected to detail the changes at speech in Melbourne at lunch today.

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