Australian senator proposes landmark digital services bill

Australian Liberal Senator Andrew Bragg opened the Australia Blockchain Week conference with a bombastic legislative proposal that he hopes will lay the groundwork for a new digital asset ecosystem Down Under.

The proposed Digital Services Act (DSA) legislative package calls for reforms in crypto market licensing, custody, decentralized autonomous organizations (DAOs), debanking and taxes. Senator Bragg said in his speech at the conference that he expects the legislation in the bill to “protect (crypto) consumers from malicious operators.”

Senator Bragg outlined the four main pillars that guide the DSA. He explained that the DSA is technologically neutral, has broad and flexible policies, is regulated by a minister rather than a bureaucratic authority, and uses state resources and personnel. In his view, such guidance will help Australia show that the country is ready to play a bigger role in the crypto industry.

“This will show that Australia is open for business and things are clear and clean.”

The senator also took on DAOs and urged various branches of government to take them seriously. He went so far as to describe them as “an existential threat to the tax base” under current regulations.

According to the published houses of Parliament In Australia, corporate tax is the government’s second largest source of revenue after income tax, but DAOs are not taxed as a company.

Senator Bragg said that his country’s “dependence on corporate taxes is unsustainable” as more and more organizations become DAOs. As a result, the DSA would task the government with creating a framework for creating standards for DAOs without suppressing its core principles.

The standards would essentially ensure consumers have access to audit, assurance and disclosure services from DAOs that help them differentiate between retail and wholesale organizations. Senator Bragg urged the Treasury Department to address these issues while “leaving the field open for DAOs to continue living up to their name.”

Michael Harris, head of corporate development at Australian crypto exchange Swyftx, advocates the government introducing higher standards for the domestic crypto industry. He told Cointelegraph today that exchanges need not fear higher standards because “most Australian exchanges already take their customer due diligence very seriously.”

Related: Aussie Fintech offers the mainstream direct access to DeFi with a fixed rate

Harris added that the country Down Under should lead the way in crypto regulation in the developed world due to its high adoption rate. A poll by pollsters finder found that 22.9% of Australians owned crypto from October to December 2021. Harris further explained:

“We see this as an important step forward. Australia has one of the highest crypto adoption rates in the developed world. It makes perfect sense that we are leading the way with regulation.”

One of the major concerns in the crypto market lately is its use by individuals and nations to circumvent global economic sanctions. There is currently one Debate rages in the US Senate on whether the Russian government is able to keep its military operation in Ukraine funded using cryptocurrency.

Blockchain tracking company Elliptic found on March 15 that some sanctioned individuals hold crypto, but Senator Bragg stated that under current Digital Currency Exchange (DCE) laws, the Australian government is powerless to retaliate against such offenders. The DCE’s lack of jurisdiction served as motivation for the new proposals to prevent sanctioned individuals from exploiting lax crypto laws, adding:

“The reality is that we are not living in a libertarian nirvana. We cannot have regulatory arbitrage.”