Government to consult on laws to foster, regulate crypto

The federal government will consider new legislation to help Australia play a part in the emergence of Web3, a new form of the internet that underpins cryptocurrencies and digital assets and which Treasury sees as a source of new jobs and tax revenue for the economy.

A new Digital Services Act would protect consumers but also “wholeheartedly and comprehensively” grasp an opportunity for Australia and “signal that we fully appreciate the promise and potential of blockchain technology”, Senator Andrew Bragg will say in a speech on Monday morning.

The legislation would form part of a wider embrace of the emerging technologies by the government, which believes they have the potential to tilt the digital playing field towards content creators and away from the global tech giants that enjoy outsize influence over the most lucrative internet gateways today.

The federal government will release a consultation paper on Monday on a licensing and custody regime for digital assets and seek the market’s view on classifying digital tokens, which will inform a Board of Taxation review on taxing digital assets due by the end of the year.

A consolidated and comprehensive legislative package would “make Australia one of the only jurisdictions confronting the issue head-on”, Senator Bragg will tell a week-long event organised by Blockchain Australia that will be streamed to crypto enthusiasts in 25 countries.

Treasurer Josh Frydenberg said “cryptocurrencies and assets are a global phenomenon, and as more Australians invest in these new asset classes and embrace the new technologies underpinning them, it is critical that we have a robust and competitive tax and regulatory regime in place. Tax certainty for investors and those transacting will also be vital.”

Treasury is working with the Australian Taxation Office to issue more expansive guidance on the current tax treatment of digital assets and the review would not result in an increase to the overall tax burden.

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