INTHEBLACK August 2022 - Magazine - Page 11
EFRAG’s recommendations yet, but decided against CPA
Australia’s recommendation to include a research project in
the IASB’s work priorities for 2022-2026 to explore the
role and prevalence of cryptocurrency-based transactions
in global capital markets. Instead, the IASB has included
the topic as part of a research project on intangible assets.
REGULATORY MILESTONES
In addition to developing a dedicated licensing regime,
Treasury provided regulatory milestones that it aims to
achieve by the end of 2022:
• Examine the appropriate regulatory structure for
innovative new corporate structures like
decentralised autonomous organisations.
• Assess the viability of a retail central bank digital
currency by the Reserve Bank of Australia and the
Treasury.
• Conduct token-mapping exercise to provide further
clarity as to how crypto assets are classified on a
risk-based and technology-agnostic basis.
CPA Australia believes the token-mapping exercise
should precede further regulatory discussions. A clear
understanding and classification of crypto assets is
essential to assess suitable regulatory frameworks.
In April 2022, the Australian Prudential Regulation
Authority (APRA) laid out a policy roadmap for developing
a long-term prudential framework for crypto assets and
related activities, including the following policy initiatives:
• Crypto activities: Undertake domestic consultations
after the Basel Committee on Banking Supervision
consultation on the prudential treatment for bank
exposures to crypto assets.
• Operational risk standards: Release draft prudential
standards for consultation in mid-2022 to cover
control effectiveness, business continuity and
service provider management. The operational risk
prudential standard will take effect in 2024.
• Stablecoins: Consider approaches to the prudential
regulation of payment stablecoins (that is, crypto
assets that are backed by stabilisation mechanisms).
APRA will continue to collaborate with international
regulatory bodies to ensure that Australia’s approach
is consistent with emerging international standards.
CURRENT APPROACH
In Australia, cryptocurrency exchanges must register
with the Australian Transaction Reports and Analysis
Centre (AUSTRAC) to comply with AML/CTF 2006
Part 6A – Digital Currency Exchange Register. The
regulations require exchanges to identify and verify
their users, maintain records, and comply with
government AML/CTF reporting obligations.
AUSTRAC has flagged that risks remain. In January
2022, it warned that almost 400 currency exchanges
operating in Australia weren’t endorsed as safe for
retail investors. AUSTRAC noted that the current
registration system doesn’t necessarily cover consumer
protection and may even give some customers a false
sense of security.
The Board of Taxation is currently reviewing the tax
treatment of digital assets and transactions in Australia,
with the report due by the end of 2022. In the
meantime, the Australian Taxation Office supports
crypto investors by providing information on:
• what crypto assets are, how they work and how tax
applies to them
• how to work out and report capital gains tax (CGT)
on transactions involving crypto assets
• how tax applies to crypto rewards and new tokens
from staking crypto assets
• how to treat a new crypto asset received as a result
of a chain split
• working out if a crypto asset is a personal use asset
and when a personal use crypto asset is CGT exempt
• what records need to be kept of crypto asset
transactions and how long to keep them
Lastly, the International Organization of Securities
Commissions has announced that it will address
crypto-related policy matters. Reports, including policy
recommendations, are expected by the end of 2023.
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intheblack.cpaaustralia.com.au August 2022 11