SYDNEY, Dec. 8 (Reuters) – Australia to create licensing framework for cryptocurrency exchanges and consider launching a retail central bank digital currency as part of its biggest payments industry overhaul of 650 billion Australian dollars (463 billion dollars) in a quarter of a century.

The country will also expand its payments laws to cover online transaction providers like Apple Inc (AAPL.O) and Alphabet Inc (GOOGL.O) Google as well as Buy It Now (BNPL) providers like Afterpay Ltd (APT ). AX), ending their operating cycle without direct supervision.

“If we don’t reform the current framework, it will be Silicon Valley that will determine the future of our payments system,” Treasurer Josh Frydenberg said in a speech. “Australia must retain sovereignty over our payments system.”

Australia’s conservative government is positioning itself at the forefront of global efforts to curb big tech companies, while taking a more inclusive approach than countries like India and China, which have criminalized cryptocurrency.

The use of cryptocurrency and non-cash payments has exploded in Australia during the pandemic as people’s lives change online.

According to government data, around 55 million non-cash payments are made in Australia every day, with almost half of the population using their phones to make payments. The number of Australians transacting in cryptocurrency has increased by 63% so far this year, compared to last year.

Frydenberg said the government would begin consultations in early 2022 on establishing a licensing framework for digital exchanges, allowing consumers to buy and sell crypto assets in a regulated environment.

The government would also consult on the regulation of companies that hold crypto assets on behalf of consumers and the feasibility of a central bank digital currency, Frydenberg added.

A spokesperson for Afterpay, which agreed to a buyout from Square Inc (SQ.N), the payments company of Twitter Inc (TWTR.N) founder Jack Dorsey, said he supported “any approach that takes into account the benefits for the consumer of the innovation and competition that Afterpay has brought to the market “.

Apple declined to comment while Google made no immediate comment.

Gerard Brody, managing director of the Consumer Action Law Center, said crypto exchange regulations would recognize that these entities “now hold significant amounts of people’s money and investments.”

Regulating BNPL companies “would address the significant risk of leverage and financial stress associated with these products,” Brody added in a statement.

GLOBAL MOVEMENTS

Australia’s move was a “timely and sensible response,” said Chloe White, former federal government cryptocurrency adviser who now runs Genesis Block, a consultancy firm providing advice on asset regulation to the industry. digital technologies and policymaking.

“Industry participants will be very excited to work on the details,” White added in an email.

Australia’s approach is in line with that of U.S. regulators, who have said they want to establish a regulatory framework to allow banks to make it easier for customers to own crypto assets. Read more

In Britain, regulators have asked for powers to govern the online promotion of crypto assets to fight a flood of “problematic content.” Read more

On the other end of the spectrum, India’s proposed laws would subject anyone using crypto as a form of payment to arrest without a warrant, while Chinese regulators have already banned crypto transactions and mining. Read more

($ 1 = 1.4047 Australian dollar)

Reporting by Renju Jose; edited by Richard Pullin and Jane Wardell

Our Standards: Thomson Reuters Trust Principles.