Australian senator drafts bill aimed at stablecoin, digital yuan regulation

Australian Liberal Senator Andrew Bragg has released a new draft bill aimed at clamping down on digital asset exchanges, stablecoins, and China’s central bank digital currency, the e-Yuan.

In a statement on Sept. 18, Senator Bragg stated that “Australia must keep pace with the global race for regulation on digital assets” as “it is essential that the parliament drives law reform” on the matter.

The new draft bill, titled Digital Assets (Market Regulation) Bill 2022, calls for the introduction of licenses for digital asset exchanges, digital asset custody services, stablecoin issuers, as well as disclosure requirements for facilitators of the e-Yuan in Australia.

Australia must keep pace in the digital assets race: a bill to protect consumers, promote investment & protect our interests.Media statement: https://t.co/VxFnAKnh1vNew Bill: https://t.co/rtMj2t9Ng2

Senator Bragg told Cointelegraph that Australia has “quite a risk exposure, as an economy, and that’s one of the reasons why we need to have a serious program for managing disruption, managing risks, that emanate from the development of a CBDC.”

Senator Bragg said the objective of this particular act is to provide “an effective regulatory framework” as well as to provide "for the reporting of information by certain banks that facilitate the use or availability of digital Yuan in Australia” and to provide “additional duties” for governing bodies in relation to this act and the “regulation of activities relating to digital assets and digital Yuan.”

Senator Bragg said that this isn’t “an accusatory position to take” it’s simply just being “prepared and gathering information” which he thinks is entirely “reasonable.”

Senator Bragg said that Australia wouldn’t benefit from having a CBDC as “privacy issues cannot be managed,” however it is important that the Australian government “put something on the table” to manage other CBDCs being introduced, as he reiterated that the Governor of The Reserve Bank of Australia has “spoken before saying there needs to be regulation on stablecoins.”

The draft bill consultation is open until 31 October 2022 and welcomes “community feedback.”

Related: Chinese municipal bank issues first-ever digital yuan loan using intellectual property as collateral

Andrew Bragg, a pro-crypto Australian politician, has been an outspoken advocate for cryptocurrency since he was elected senator in 2019. Senator Bragg has been pushing for a clear regulatory framework for digital assets and crypto companies since 2021, in an effort to prevent local startups from moving overseas.

Senator Bragg noted that he “chaired the committee” for digital assets with “no fixed view at the time” and “conducted an inquiry into these matters” as well as informing himself “about the risks and opportunities.”

Meanwhile, the Australian Labor government is said to be working on “crypto asset reforms” to “improve the way Australia’s regulatory system manages crypto assets."

Last month, the treasury stated it will “prioritize token mapping work in 2022, which will help identify how crypto assets and related services should be regulated.”

Australian Treasurer Jim Chalmers stated that this token mapping consultation paper will “be released soon” making Australia’s leaders in the space as it “hasn’t been done anywhere else in the world.”

The aim is to identify “notable gaps in the regulatory framework, building a “licensing framework, review innovative organizational structures, look at custody obligations for third party custodians of crypto assets and provide additional consumer safeguards.”