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Australasia Paytech Regtech

Australia Outlines Plans to Modernise Its Financial System

Australia has outlined plans to shakeup its financial services laws in order to regulate buy now, pay later and improve the regulatory framework for crypto companies.

The Australian government has pledged to deliver reforms in 2023 to modernise the country’s financial system to embrace new economic opportunities and respond to future challenges.

It plans to:

  1. Update and strengthen Australia’s payments system
  2. Strengthen our financial market infrastructure
  3. Establish a regulatory framework for buy now, pay later (BNPL)
  4. Establish a framework for the licensing and regulation of crypto service providers

It will release a ‘strategic plan’ for the future of Australia’s payments system in the first quarter of 2023 – in collaboration with regulators, industry, consumer and business representatives. This week it released a consultation paper to help finalise the plan.

The paper seeks views on questions including principles to support a world-class payments system, priorities that reflect the evolving payments landscape, and supporting reform initiatives and actions.

“Unfortunately, our regulatory architecture has not kept pace with changes in the market,” said a joint release by Australia’s Treasurer Jim Chalmers and Assistant Treasurer and Minister for Financial Services Stephen Jones. “In many areas, the previous government sat on its hands. In other areas, it made announcements but didn’t deliver.”

Crypto regulation

Prime Minister Anthony Albanese‘s government is also taking action to improve the regulation of crypto service providers.

The next steps in the Government’s ongoing ‘token mapping’ work will include the release of a consultation paper in early 2023 to inform what digital assets should be regulated by financial services laws, as well as the development of appropriate custody and licensing settings to safeguard consumers.

Following the release of token mapping, the Government will also consult on a custody and licensing framework next year before introducing legislation.

The paper also seeks to explore the policy rationale for an Australian CBDC, including investigating the economic, legal, regulatory and technological considerations associated with an Australia CBDC.

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