Bitcoiners may be encouraged by the Australian Securities and Investments Commission’s (ASIC) recent submission to the ongoing Senate Economics Committee for the ongoing inquiry into digital currencies.
The 32-page document offers the commission’s detailed perspective on how digital currencies ought to be handled by a regulatory framework, with a focus on the investments and securities perspective.
The document recommended that a digital currency exchange should not be required to obtain an Australian market license. Furthermore, an Australian financial services (AFS) license should not be required to (1) trade in digital currency, (2) hold it on behalf of someone else, (3) provide advice on digital currencies or (4) facilitate its sale.
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This is because of the commission’s view that “digital currencies themselves do not fit within the current legal definitions of a ‘financial product’.”
However, contracts for the sale of digital currency (derivatives) may be considered financial products if there is a delay between their sale and delivery.
The commission also notes how its view that bitcoin is not a currency is consistent with that of the Australian Taxation Office (ATO), which in its submission to the inquiry, sought to further refine this definition to at least consider it “money.” This would, for example, exempt the sale of bitcoin from GST.
Note, however, that the commission’s exemptions do not necessarily absolve companies from money services business licensing where required by the Australian Transaction Reports and Analysis Centre (AUSTRAC). The topic is not covered in the commission document, and there is only brief mention of the agency’s relevance on the matter. Such licensing would likely be required for exchanges or other businesses engaging in the transmission of funds–especially if fiat is involved. This may be true even for companies transacting solely in digital currency, as is the case in the US and Canada, especially when considering the ATO’s view that it be considered money.