Australia has generally been considered as a fairly friendly and stable jurisdiction for blockchain and cryptocurrency businesses to operate in. This has been driven in part by Australia’s overall approach to the financial technology sector, with the Commonwealth Government of Australia supportive of broad growth and innovation.
Up to this point, the government has taken a largely non-interventionist approach to the regulation of cryptocurrency, enabling the landscape to evolve at a fast rate without huge regulatory limitations.
While there has been no legislation created to handle cryptocurrencies as a discrete area of law, they are being captured within existing regimes under Australian law nonetheless. The sale of cryptocurrency and other digital assets is regulated by Australia’s existing financial services regulatory regime. Issuers go through a wide range of core considerations from licensing, marketing, cross-border issues to consumer law, taxation and more.
As of now, there are no specific regulations in dealing with blockchain or other distributed ledger technology (DLT) in Australia. Though, businesses who consider operating market infrastructure, or providing financial or consumer credit services using DLT will be subject to the compliance requirements which currently exist under the applicable licensing regime. There’s also a general obligation that entities relying on technology connecting with the provision of a regulated service must have the necessary organizational competence and adequate technological resources and risk management plans in place.Many cryptocurrency networks have implemented “smart” or self-executing contracts as well. These are permitted in Australia under the Electronic Transactions Act 1999 (Cth) (ETA) and the equivalent Australian state and territory legislation. The ETA gives a legal framework to allow electronic commerce to operate in the same way as paper-based transactions. Under the ETA, self-executing contracts are permitted in Australia, given they meet all the traditional elements of a legal contract.
By Lucy Ng