The Australian Blockchain Week 2022 just heard a radical and transformational speech from Senator Andrew Braggs. The Liberal Senator proposed a Digital Services Act, a comprehensive legislative package which would make Australia “one of the only jurisdictions confronting this issue head-on, signaling that we fully appreciate the promise and potential of blockchain technology.”
The Digital Services Act will tackle the issue of legislation of crypto market licensing, custody, DAOs, debanking, tax and tokens.
Senator stated that the Act would be guided by four principals:
1. Technology neutrality.
2. Broad, flexible principles, not a prescribed code.
3. Regulation by a Minister, not bureaucratic agencies.
4. Within Government, cooperation and appropriate powers, resourcing and personnel.
Talking about DAOs, the Senator mentioned how the Company Tax accounted for 17.1% of the total revenue of the country, and not regulating DAOs makes them an “existential threat to the tax base”.
He says that legal recognition of DAOs is necessary to legislate the minimum standards, which include limited liability, a person responsible within the jurisdiction, as well as a consumer protection framework to distinguish between wholesale and retail DAOs, and several other suggestions.
He also mentions that these issues should be addressed by the Treasury in a manner that will allow “DAOs to continue to live up to their names. Any attempt to prescribe a code be self-defeating”.
The senator says that applying the existing tax law wholesale to the digital assets ecosystem would suffocate the sector.
The tax arrangements for digital assets will be reviewed by the Board of Taxation on the request of the Treasurer. He says that the review should clarify the tax status of “among other issues, Initial Coin Offerings, play-to-earn games, airdrops, staking, and the currency state of stablecoins and CBDCs.”
A token mapping exercise will be convened by the Treasury along with the review.
The senator also talks about the issue of the possibility of Russians using cryptocurrencies as a backdoor to avoid sanctions and fund their war.
“The reality is we don’t live in a libertarian nirvana. We cannot have regulatory arbitrage.” He uses this argument to convey the urgency of the need for the regulation of the crypto industry.
The Australian Blockchain Week is supported by FTX, an Australian cryptocurrency exchange platform, which is also the naming rights sponsor of the event.
The event starting today will feature over 75 online, in-person, and hybrid events with over 200 speakers, including FTX CEO, and will end on March 25.
