MasterCard has called on Australia to force Bitcoin transactions to go through „regulated and transparent administrators” in the same way as other participants in the country’s payments system. In its submission to a Senate inquiry into cryptocurrencies, the card giant argues for a „level playing field” with technology neutral regulations that can apply to the likes of Bitcoin and Ripple.
MasterCard says that cryptocurrencies currently fail to offer people the minimum standards that payment services should provide: safety, stability and reliability.
„Currently, digital currencies lack the basic protections consumers have come to expect when transacting online. For example, contrary to a consumer’s experience when paying with a MasterCard product, if a consumer uses digital currency to make a purchase on line and the merchant fails to deliver the goods, the consumer has no recourse through the digital currency’s network. Similarly, if the consumer’s device containing digital currencies is lost or stolen, the digital currencies may be lost forever, just like cash.”
„When transacting with a digital currency there is no bank, administrator, or regulator that could otherwise stand behind the value of a digital currency or its network. This means that consumers have no recourse if a digital currency loses its
value or if the digital currency system fails.”
This is why MasterCard is calling for a requirement that all transactions go through regulated and transparent administrators subject to supervision by Australian authorities, rather than just the blockchain process.
In addition, there should be licensing and prudential supervision of all administrators comparable to non-bank money transmitters, with obligations to perform KYC, maintain AML programmes and file suspicious activity reports. Meanwhile, a consumer complaint process should be put in place.
Concludes the submission: „These provisions should support Australia in developing an effective regulatory scheme that also protects society against criminal activities and also provides consumers in Australia with safety, stability and reliability when transacting with digital currencies.”
According to finextra.com, Australia’s largest Bitcoin company, CoinJar, has just outlined plans to move its headquarters to the UK to take advantage of a more favourable regulatory regime and avoid the 10% Goods and Services Tax levied on customers using its service down under.
Whether tax authorities will consider altering the need for digital currency exchange and handling entities to comply with general sales tax (GST) may well depend on their continued success in the EU and elsewhere. Regarding the GST, Andreas Antonopoulos explained to cointelegraph.com:
“By doing regulation in that way, Australia’s not making Bitcoin slow down, what they’re doing is making Bitcoin move out.”
MasterCard made one of 31 submissions to the Economics References Committee’s inquiry which has now begun hearings and plans to report in the spring.
MasterCard supports the definition that a digital currency is any type of digital unit that is used as a medium of exchange that does not have all the attributes of real currency and is convertible into, and has an equivalent value in, real currency, or acts as a substitute for real currency. Examples of a digital currency include Bitcoin (the predominant digital currency) and Ripple.
Read MasterCard’s submission here: download the document now (1,3 mb – pdf file)
Banking 4.0 – „how was the experience for you”
„So many people are coming here to Bucharest, people that I see and interact on linkedin and now I get the change to meet them in person. It was like being to the Football World Cup but this was the World Cup on linkedin in payments and open banking.”
Many more interesting quotes in the video below:
