Australia may soon have strict AML and KYC policies governing Bitcoin platforms and transactions. The new regulations, similar to the ones recently proposed by the European Commission will be presented at the upcoming counter-terrorism financing summit in Bali, Indonesia.
The recent developments in the financial regulations will make Australia one of the first countries to introduce strict Anti-money laundering and Counter terrorism financing laws to the digital currency sector. For starters, the Australian financial ecosystem has always been hostile towards Bitcoin and other digital currencies. AUSTRAC, the country’s financial intelligence agency believes that the anonymity of digital currency makes it an attractive mode of transaction for terrorist organizations.
According to reports on the Australian media, the country’s Justice Minister Michael Keenan will be discussing the new developments at the summit. The new regulations are being put in place following the recommendation made by a digital currency review committee.
While Australia seems to be jumping the gun in order to make it hard for the digital currency ecosystem to thrive in the country, there are no credible reports tying Bitcoin or any other digital currencies to terrorist activities until now. Even prepaid travel cards may come under the new regulations after AUSTRAC’s report titled “Terrorism Financing in Australia 2014” mentions its use in transferring funds offshore to fund terrorism.
The new regulations will treat digital currency on par with fiat currencies when it comes to AML, KYC, and CTF, which may provide a certain degree of legitimacy to Bitcoin transactions. At the same time, these regulations will also make it hard for digital currency startups to operate due to increased cost of compliance.
Australia has already witnessed the exodus of Bitcoin and digital currency companies after the country subjected the digital currency to GST. The decision was later reverted, but not in time to prevent the damage. The impact of new regulations on country’s Bitcoin industry is yet to be seen.