Senate debates

Tuesday, 31 August 2021



7:20 pm

Photo of Andrew BraggAndrew Bragg (NSW, Liberal Party) Share this | | Hansard source

I rise this evening to make some remarks about cryptocurrency. It is remarkable that one in five Australians have exposure to cryptocurrency, according to various surveys. This is a phenomenon which may not be well understood by legislators. Certainly, there was a debate in the US Senate just a couple of weeks ago on this exact question, and I think one of the senators—it may have been Senator Cruz—made the remark that only two or three of the US senators really had any sense of what cryptocurrency is. I'd say it's probably fair enough to apply that here, including to myself, but cryptocurrency is something that has taken hold with younger generations. It appears to me that, as it is a $1 trillion industry now, we want to be doing all we can to ensure that Australia and Australians can get the most benefits that they can from digital assets and cryptocurrency.

The question is: what are the benefits of these new innovations and changes? The answer is 'more efficiency', which is perhaps quite boring, but in a real sense it is also 'more choice and more competition', in particular with traditional financial services providers, where for decades we've seen banking oligopolies and the like taking hold. We could see cryptocurrency and digital assets breaking down the barriers to competition, so that people can have more choice in running their own affairs. One of the interesting things that I've learned in studying this sector is that younger people want to do banking and finance differently to their parents. They want to have more control. They want to have a say. Decentralised finance, I think, presents really interesting opportunities for us to break down some of the longstanding traditions in Australia where we've seen too much power in the hands of too few. The opportunity for Australia, in terms of choice, is clear.

The opportunity for jobs is also very clear. I have to say, I've been blown away by how many jobs this industry has already created in my home state of New South Wales for people who are working at cryptocurrency exchanges and the like. There seem to be dozens of these companies employing 40 or 50 people, and they're managing a lot of assets, so we want to make sure that there is a proper framework around this industry.

It is important that we don't have regulatory arbitrage, where on one side you have a heavily regulated financial sector and then on the other you have a totally unregulated sector with people doing very similar things. We want to make sure that there is consumer protection in this space, but we also want to make sure that we are incentivising investment. If there is a $1 trillion sector out there, we want to make sure that we're getting as much as possible of that benefit, in terms of investment and jobs, into our country. After all, we have a safe jurisdiction. The laws here are certain. So we should be looking to have policies and laws which are at least as good as those of Singapore, the UK and the US. Certain US states have already passed very detailed laws to deal with digital assets and cryptocurrency, which is attracting investment, jobs and new choice.

We want to be a fast mover here. It has taken a long time to enact changes to our companies law to incentivise more investment in certain parts of the finance sector. Certainly, we can't wait decades to put in place new laws to protect investors and incentivise investment in this cryptocurrency space. The trade-off here for us as a country is exactly that: how do we protect consumers, who are already widely using these assets—one in five Australians, according to some surveys—and, equally, ensure that we capture that investment and those jobs, in places like Sydney in particular? We are competing with Singapore, we are competing with London and we will compete with states like Wyoming in the US, which have passed detailed laws.

Where to from here? There's a Senate committee, which I'm chairing, that is looking at this in detail. We will come back by October with a plan to deal with cryptocurrency and digital assets, which will look at markets and custody. It will look at the tokens and the tax settings, and it will put forward a plan that can put Australian digital assets and cryptocurrency at the top of the heap, certainly in our time zone.