A new bitcoin exchange launched yesterday in Sydney, Australia, with an aim to improving general consumer confidence in the digital currency market.
Called Independent Reserve, the exchange is promoting both itself and its Australian base as secure and well-regulated, saying the country’s AAA credit rating and political stability made it the ideal place to locate.
It will aim first at the local and New Zealand markets before expanding overseas to the financial centers of Asia, though says it already has the ability to electronically verify customers in minutes from over 20 countries by working with identity specialists Global Data Company.
Adrian Przelozny, Independent Reserve’s co-founder and chief technology officer, told CoinDesk the company has been in regular contact with local financial regulator the Australian Securities and Investments Commission (ASIC) and would adhere to all KYC and AML compliance protocols.
“We’re very comfortable that we have the right settings here to ensure its safety and success.”
Australian tax issues
A recent ruling by the Australian Tax Office on digital currency use was met with concern from the local bitcoin community, who said the definition of those currencies as akin to barter transactions and not ‘money’ or ‘financial supply’ would lead to the 10% Goods and Services Tax (GST, or sales tax) being applied twice – once when purchasing bitcoins and again when using them to purchase other goods.
If passed on to consumers, it would also make bitcoins purchased in Australia 10% more expensive, most likely driving users to overseas exchanges and local companies out of business.
Independent Reserve, Przelozny said, would absorb the GST with its own profits and through the 0.5% brokerage fee it charges Australian customers, keeping its prices competitive.
“We strongly believe that Australians should not be penalised for the use of bitcoin […] This would stifle bitcoin innovation in Australia and ultimately force companies to move operations offshore which would have a negative impact on the Australian economy as a whole.”
Independent Reserve is backed by a group of private investors and its executive team has years of experience in the finance and IT industries. CEO Adam Tepper has worked as a software Engineer and Solutions Architect at major Australian companies like ANZ bank, AMP insurance, and the Nine Entertainment Company.
Przelozny worked with Tepper at those three companies and both men were also co-founders and managing directors of Asia Australia Technology, a software engineering firm.
Independent Reserve, Przelozny added, has spent “thousands of hours on R&D to make sure our platform is completely robust and our proprietary technology includes many levels of safeguards to ensure users are well protected.”
Tepper told the Sydney Morning Herald that the exchange is doing everything it possibly can to mitigate risks and ensure people feel secure about keeping money there. He mentioned that accounting firm PricewaterhouseCoopers would be auditing all Independent Reserve’s finances.
Bitcoin in Australia
Australia’s international reputation as a stable business and legal environment, and financial services center, could serve digital currency companies well when attracting overseas customers.
It recently called a Senate Inquiry into bitcoin and digital currency use, which has increased confidence in the country’s ability to take a sensible approach toward regulation.
While the market in Australia is relatively small compared to North America and Europe, bitcoin brokerages such as CoinJar, Bit Trade Australia and igot have performed well in the local market and payment processors such as BitPOS (as well as CoinJar) are working hard to build a local digital currency-using economy.
Sydney image via Shutterstock