Lawyers and bitcoin groups in Australia are joining those in other countries in calling for greater clarity on bitcoin regulation, allowing clearer direction for both businesses and consumers on how to conduct their affairs in a digital currency economy.
There is a growing argument for such structures: lawyers in Poland this week called for more consumer protection surrounding bitcoin, saying a lack of regulation denied users the rights available to those using more traditional payment methods. Furthermore, the industry is currently debating the pros and cons of New York's just-released 'BitLicenses' structure for compliance.
Then there's the continuing problem of existing banks and others in the finance industry refusing to work with bitcoin-accepting businesses, unilaterally closing accounts or publicly denying agreements.
Advocacy group meets with officials
These included officials from the Australian Taxation Office (ATO), the Australian Securities and Investments Commission (ASIC), Treasury, the Reserve Bank of Australia, plus a number of other government departments and law enforcement bodies.
Tucker told CoinDesk:
He said the meeting was well received, despite some obvious concerns, that officials knew what was at stake with the new technology and were taking it quite seriously, adding:
The proposal ADCCA pitched was that the industry self-regulate, with government providing a liaison to assist it in doing so. That would help create a robust financial services framework around the digital economy.
Australia already had a world leading financial services legislative framework in place, he added, and could really establish itself as a leader in the digital space.
Tucker said ADCCA was watching developments in Japan, where the government has been instrumental in forming the self-regulatory body Japan Association of Digital Asset (JADA). There also have been positive moves in the UK, US and Singapore.
Call for clear, sensible policy
Amor Sexton of Adroit Lawyers in Sydney is Australia’s first 'digital currency lawyer'. In addition to providing advice to bitcoin businesses, she has been actively involved in liaising with the government and the regulators on behalf of the industry.
Sexton said a level of regulation is necessary to foster trust from consumers and other market players, to increase adoption of bitcoin. Warnings from organizations like the European Banking Authority mainly concerned consumer protections and preventing money laundering – risks Sexton said could be largely mitigated by regulating businesses that interact with consumers.
She told CoinDesk:
Not too fast
Balance is the key, Sexton said. Regulation needs to mitigate risks without creating a compliance burden that stifles innovation, and the government must consider the benefits of a robust digital currency industry.
The benefits to places like Australia would be increased innovation, competition, and efficiency in the financial services sector. For an isolated country like Australia, bitcoin's lower fees would also open new world markets to small and medium sized businesses.
She added that even though there was a need for more clarity on the issue, governments should still take the time to familiarize themselves with the technology first, understand its uses and consider wider policy implications.
Sexton is one lawyer leading the way in providing advice to companies regarding digital currency use and assisting the government in formulating policy. She has also organized a 'Bitcoin for Accountants' seminar in Sydney to familiarize accountants with bitcoin transactions and some of the surrounding accounting issues.
Need for bank support
Bramanathan also stressed the need for patience, urging a "sensible approach". This would allow banks and financial institutions to support bitcoin, he said, which would be a "huge step for bitcoin businesses and users".
He also told CoinDesk there should be an opportunity for self-regulation, agreeing with ADCCA's Tucker.
Australia's two key bitcoin organizations are the BAA (affiliated with the Bitcoin Foundation) and ADCCA, which is also open to non-bitcoin businesses in the existing financial sector. Like ADCCA, the Association is in ongoing consultation with government departments and regulatory bodies.
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