The Australian government is considering the regulation of the local digital currency space by revealing plans to bring bitcoin exchanges under the scope of anti-money laundering (AML) and counter-terrorism financing legislation.
In its bid to foster an embracing and encouraging stance toward the local digital currency and blockchain industry, the Australian government is considering regulation of the sector.
In August 2016, AUSTRAC, Australia’s financial intelligence agency that is tasked toward combating money laundering and counter-terrorism financing called for the government to regulate the digital currency industry under the existing laws.
An official response sheet published yesterday reveals the government’s opinions and responses to a number of FinTech-related recommendations put forth by the Productivity Commission, an advisory body to the government.
In the midst of a number of proposals, the advisory body recommended the Australian Government to amend existing AML/CTF legislation to include digital currency businesses, like bitcoin exchanges, to fall under the law’s purview.
In response, the Government revealed it supported the recommendation, adding:
The Government is committed to facilitating innovation and growth in the digital currency sector and considers that appropriate anti-money laundering and counter-terrorism financing (AML/CTF) regulation will aid that development.
In working toward regulations, the Government pointed to a 2016 statutory review of Australia’s existing AML/CTF legislation that looked into the regulation of digital currencies.
Considering multiple regulatory moves, the review pointed to the approach taken by the likes of the United States, United Kingdom and Canada, one wherein existing AML/CTF regulation was extended to include digital currency exchanges. This, the review said, ‘would encourage innovation and investment by ensuring service providers have greater certainty and security in their dealings with digital currency businesses, while reducing the money laundering risks and terrorism financing risks associated with this emerging technology.’
Pointedly, an excerpt from the Australian government’s response read:
In particular, it is recommended that Australia extend AML/CTF regulation to digital currency exchange businesses. The Government will also consider guidance from the FinTech Advisory Group as part of broader considerations around the AML/CTF regulation of digital currencies.
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