Proposed tightening of Australian cryptocurrency regulations could stifle competition: Kraken

According to reports, Australia will strengthen encryption regulation in the next 12 months. Jonathan Miller, managing director of Kraken Australia, believes that a strict encryption system may stifle local competition.

Australia’s Senate Committee as a Technology and Financial Center, composed of Crypto-friendly senator Andrew Bragg presents 12 broad recommendations Last month’s supervision of the digital assets and financial technology industry. These proposals include a new cryptocurrency transaction permission system, a new law governing decentralized autonomous organizations (DAO), and a comprehensive reform of the capital gains tax in decentralized finance (DeFi).

In an exclusive interview with Cointelegraph, Miller stated that it remains to be seen whether the proposed regulations will have a positive or negative impact on the development of the local sector, noting:

“We have seen heavy regulatory regimes in other markets, you know, you have seen the collapse of competition, and our vitality in Australia has collapsed today.”

“I hope this will not happen, because it is not good for consumers in the long run,” he added.

According to the proposed market license of the Australian Digital Currency Exchange (DCE), local companies need to meet strict “capital adequacy, audit and responsible person” requirements to obtain an operating license.

When talking about this, Miller compared Japan with Japan because he believes that due to government policies, the number of options on the market is limited. Strict licensing requirements This has also had a negative impact on local consumers.

“[Kraken has] Japanese market license, one of the very few encryption companies that Japanese users can use. Although we are very active there and we really support that market, I think it is not good for the Japanese because there are very few opportunities for space players,” he said.

Caroline Bowler, local CEO Cryptocurrency exchange BTC Markets However, he put forward a different view, telling Cointelegraph that Australia’s upcoming encryption system will “enhance and promote innovation.”

“I think this proposal has many very forward-looking views. Especially the discussion on DAO, from a regulatory perspective, it will be extremely innovative for any country, any jurisdiction, and any place in the world. Yes,” she said.

Bowler said that the “biggest obstacle” the company encountered last year when it explored expansion opportunities for compliant services and products was Australia’s lack of encryption-focused regulation:

“This has caused problems for the entire enterprise, problems for us to expand our business, and problems for our customers, and it has caused the people who come in to hesitate. We cannot provide the full range of services we want to provide. “

“The licensing system that currently exists in the traditional market is an unfit shoe. We can’t squeeze in,” she added.

related: Australian Senator says DeFi “will not disappear anytime soon”

Adrian Przelozny, CEO of Independent Reserves (IR), a cryptocurrency exchange based in Australia and Singapore, expressed similar views with Bowler, noting that “the benefits of regulation far outweigh any risks”.

IR becomes the first Australian cryptocurrency exchange Obtained a major payment agency license in Singapore in early October. Przelozny stated that the company’s registration under the Singapore Monetary Authority’s licensing system has greatly improved IR’s legitimacy in the eyes of its potential partners:

“I can tell you that it is much better to be in a licensed jurisdiction than in an unlicensed jurisdiction. This is because it really changes our dialogue with our partners.”

Przelozny emphasized that the “biggest challenge” facing Australian crypto companies is to ensure good banking relationships, and de-banking is a key issue in the local crypto environment. The CEO of IR stated that once the local company can obtain the appropriate license, this may no longer be a problem.

“In Singapore, as soon as we got the license, we found that the bank’s conversation had completely changed, and now the bank is looking for us to become their customers,” he said.