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7.82 Rather Enabling Environment
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As of today, Australia ranks quite high internationally in terms of the volume of the cryptocurrency market. In July 2018, there were 16 crypto exchanges in Australia. The Australian dollar ranks 14th among national currencies in terms of the volume of exchange operations with bitcoin. In December 2017, Australia ranked 15th in the world by the number of ICOs. When it comes to the number of blockchain start-ups, Australia currently ranks seventh.
The Australian regulators turned their attention to cryptocurrencies and blockchain technology quite early. As early as at the beginning of 2014, the Australian Taxation Office and the Australian Transaction Reports and Analysis Centre (AUSTRAC) reported that they were exploring the possibility of regulating cryptocurrencies in taxation and combating money laundering and financing of terrorism. In 2017 new regulation resolving double taxation of cryptocurrencies problem came into effect. As well in December 2017, the Parliament adopted amendments to the legislation on combating money laundering and financing of terrorism. From that moment on, crypto exchanges had to obtain licenses for their activities from the Australian Transaction Reports and Analysis Centre (AUSTRAC).
The Australian state encourages the use of blockchain technology in various areas (for example, transport and social payments). Overall, the history of the development of blockchain and cryptocurrencies in Australia shows a stable and lenient attitude towards them from local regulators.
Rather Enabling Political Environment
Most of Australia's influential political actors are involved in the discussion on the possibilities of using blockchain and regulating cryptocurrencies. Focus is placed mostly on the ways of introducing distributed ledger technology in various spheres of the economy and state administration. In both dimensions, government agencies work together with blockchain associations. There are no serious contradictions between the positions of key political figures. The Government of Australia sees innovative potential in the introduction of blockchain technology and distribution of cryptocurrencies. State authorities note the effectiveness and reliability of the said technologies and work to create an enabling regulatory environment for their development, as well as to reduce risks and threats associated with the use of cryptocurrencies.
Rather Enabling Legal Environment
Regulatory Convergence In Australia, there is no comprehensive special legislation that is uniformly applied to regulate legal relationships in the field of blockchain and cryptocurrencies. At the same time, the main types of activities in this area are reflected in the legislation, and various branches of law uniformly evaluate the legal nature of such legal relationships. There is no single body authorized to regulate this sphere. The key regulators are: Australian Transaction Reports and Analysis Centre (AUSTRAC), Australian Taxation Office (ATO), Australian Securities and Investments Commission (ASIC).
Definiteness of Legal Regulation The special legislation regulating the legal relationships arising in connection with the use of blockchain and cryptocurrencies is not comprehensive. Specific legislation includes the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill, the Australian Consumer Law, the Corporations Act (CA) and others. The procedure for the application of these laws to the legal relationships related to the use of blockchain and cryptocurrencies is explained in detail by regulators in their respective resolutions and instructions (that are not legislative acts). ICOs are legal, but depending on the structure of the project, may fall under the Corporations Act. Transactions with cryptocurrencies are subject to the AML/CTF and controlled by the AUSTRAC. The use of cryptocurrencies in business and individual ownership is subject to taxation, and tax treatment depends on the use.
Stability of Legal Regulation The special legislation regulating operations related to blockchain and cryptocurrencies came into effect less than a year ago. Since that moment no changes have been made to the applicable legislation, and at the moment no changes are planned, and there are no corresponding draft laws.
Adequacy of Legal Regulation The legislation and law enforcement practice are adequate, providing the necessary framework for the development of companies using cryptocurrencies and blockchain technology.
Situation with the Rule of Law Australia has high indicators of the rule of law, ranking 10th in the world among 113 countries. The conditions of the legal regulation of blockchain and cryptocurrencies are rather favorable, and since the values of the sub-criterion of the rule of law are high (0.81), the amount of the difference between weighted (multiplied by Rule of Law Index score) and unweighted assessments are not significant. This indicates low risks associated with the general conditions of compliance with legal safeguards in Australia.
Enabling Infrastructure Environment
Australia has a well-developed infrastructure for the introduction of digital technologies. The country ranks second of 193 states by the E-Government Development Index.
Australia ranks 14th of 190 countries of the world in the WB's Doing Business rankings.