Policy update for October 2017

It’s been an extraordinarily busy month for fintech policy in Australia during late September and across October, so we thought it might be best to bring it altogether in the one post.

Removal of double taxation on digital currencies

On 19 October, we were very excited to see that the Australian Parliament finally passed legislation to remove double taxation from digital currencies.  Australia is understood to be one of only a handful of countries which has made such an announcement.

This legislation will be backdated to 1 July, 2017. The legislation means when used to buy goods and services, digital currencies will be treated just like money for tax purposes.

FinTech Australia has been lobbying for this outcome since February last year.

ASIC guidance on initial coin offerings (ICOs)

On 28 September, the Australian Securities and Investment Commission (ASIC) released detailed information about the potential application of Australian corporations law to businesses that are considering raising funds through an ICO.

Our CEO, Danielle Szetho, said ASIC’s announcement was recognition of the importance of ICOs as a mechanism for start-ups raising funds.

Our submission to open banking inquiry

FinTech Australia has called for consumers and businesses to be able to more easily access their financial data, including in areas such as superannuation and insurance, as part of its submission to the Australian Government’s open banking inquiry.

The submission calls for:

  • Data aggregators that act with a consumer’s permission to retrieve their bank data (often known as ‘screen scraping’) should also be formally legitimised by recognising them within ASIC’s ePayments code
  • A phased introduction of open banking, starting with current account data and product data in June 2018, then an extension to insurance and superannuation data in December 2018. The final phase would allow customers to instruct institutions to initiate or complete a transaction via the open banking framework by June 2019.
  • The creation of a detailed customer education campaign about the initiative and how they can harness their own data.

New banking legislation introduced

On 19 October, Treasurer Scott Morrison introduced new legislation into the Australian Parliament, which will lift the prohibition on the use of the word ‘bank’, so all banking businesses with an authorised deposit institution (ADI) licence will be able to use this term. Currently only ADIs with more than $50 million in capital can call themselves a bank.

This initiative will remove a significant barrier for new players who wish to enter the market.