SYDNEY (Reuters) – Australia will overhaul its regulatory framework for payments systems for the first time in more than 20 years, giving authorities the power to oversee the use of digital wallets and cryptocurrencies, said on Wednesday. Treasurer Josh Frydenberg.
Under the proposed changes, the treasurer will have the power to direct payment systems policies, oversee payment policy and fill gaps in the regulatory framework, according to excerpts from government plans seen by Reuters.
“If we don’t reform the current framework, it will be Silicon Valley that will determine the future of our payments system,” Frydenberg is expected to say in a speech to the Australian-Israeli Chamber of Commerce. “Australia must retain sovereignty over our payments system.”
The move comes as more Australians turn to tap-and-go transactions on their smartphones using Apple and Google’s digital payment platforms, as well as to buy now, pay. later companies such as Afterpay Ltd.
These systems are currently outside the laws governing payment systems, as the government is considering proposed changes to bring them into the regulatory fold.
Around 55 million non-cash payments worth around A $ 650 billion ($ 463 billion) are made in Australia every day, with almost half of Australians using their phones to make payments, according to government data.
Without regulatory reform of the payments system, which has remained largely unchanged for the past 25 years, companies will be able to conduct largely unregulated transactions, Frydenberg will say.
Regarding cryptocurrencies, the proposed rules will offer consumers greater protection for their investments, while businesses will have more clarity on obligations. The government will also begin a study on the feasibility of a retail central bank digital currency in Australia.
The reforms will progress in two phases, with the most urgent to be consulted in the first half of 2022 and the rest by the end of next year.
($ 1 = 1.4047 Australian dollar)
(Reporting by Renju Jose; editing by Richard Pullin)
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