Senator Andrew Bragg of Australia called for “prompt” legislation governing decentralized autonomous organizations (DAOs).The Digital Services Act (DSA) aims to regulate the cryptocurrency market, (DAOs), and taxation.FTX has established local presence in Australia.
Australian Senator and Liberal Party member Andrew Bragg began the Australia Blockchain Week conference with a bombshell legislative initiative that he hopes will lay the groundwork for a new Digital Asset economy in Australia.
Crypto regulation in Australia
The Senator’s proposed bill, the Digital Services Act (DSA) would among other things, regulate cryptocurrency exchanges, digital asset custody, decentralized autonomous organizations (DAOs), and taxation of digital assets. The introduction of the DSA comes as no surprise in light of Australia’s recent push to become a global leader in blockchain technology development.
In his speech, Senator Bragg stated that the DSA would establish a “light-touch” regulatory regime for the digital asset economy that would strike a balance between promoting innovation and protecting consumers. The bill would also create a new class of financial products called a “digital asset” and establish a licensing regime for digital asset service providers. The Senator went after DAO’s and challenged various branches of government to treat them seriously. He went so far as to call them a “potential existential risk” to the tax base under existing rules.
The DSA’s four key pillars were outlined by Senator Bragg. The DSA was intended to be technologically neutral, have broad and flexible standards, be governed by a Minister rather than a bureaucratic agency, and make use of government resources and personnel, according to its creator. The Australian government is considering providing crypto investors with financial assistance to help new businesses build their operations and increase local competition. In his view, such advice would assist Australia in demonstrating that it is prepared to play a greater role in the cryptocurrency sector.
The Senator’s proposed bill is significant because it would be the first comprehensive attempt to regulate the digital asset economy in Australia. If enacted, the DSA would provide much-needed clarity for businesses operating in the digital asset space and could pave the way for Australia to become a global hub for blockchain innovation.
Senator Bragg calls for taxation of DAOs
According to statistics from the Parliament of Australia, when it comes to financial income, DAOs are second only to company tax. However, DAOs are not taxed as firms since they are decentralized autonomous organizations.
As a result, there is a big loophole in Australia’s tax system, which the DSA seeks to address. The bill would require DAOs to pay corporate taxes on their income and profits. It would also allow the government to better track the spending of public funds by introducing reporting requirements for DAOs.
The standards would guarantee that customers who use DAOs for business can obtain audit, assurance, and disclosure services from those organizations to assist them to distinguish between retail and wholesale businesses. Representative Bragg urged the Treasury to address those issues while also “keeping the door open for DAOs to live up to their name.”
The Australian government has a friendly stance on crypto and they are open to regulating the emerging sector. Cryptopolitan recently reported that the country is also considering the creation of a central bank-issued digital currency to restructure the crypto market. They want to overhaul their payment system in 25 years’ time. Treasurer Josh Frydenberg is anticipated to provide details of changes. The new laws would give him greater authority. The state is currently functioning under norms established more than three decades ago.
By the end of 2022, the government expects to get a report on digital asset taxation, conduct a token mapping exercise, and examine the regulation of DAOs.
In other news, FTX has established a local presence in Australia and is well-positioned to take advantage of the growing digital asset economy. FTX is a cryptocurrency derivatives exchange that offers a wide range of products including futures, options, and leveraged tokens.