- Senator Andrew Bragg has introduced a proposal pushing for stronger consumer protection policies
- If passed, the bill would establish regulation for DAOs, crypto markets, custody services and taxation
Australia is poised to join the growing list of countries taking concrete steps to regulate the use and adoption of digital assets. According to recent reports, the Australian government plans to redefine the status of payment systems—an effort that would also affect digital currencies.
The aim is to implement investor protections, clear tax rules for cryptocurrencies, and regulatory standards for custodial firms and digital-asset exchanges.
“The government cannot guarantee your crypto any more than it can guarantee a painting or a share in a company, nor should it,” observed Australia’s Minister for Financial Services, Jane Hume. “But we can ensure that exchanges, custodians and brokers operating in Australia—the Australian participants in the crypto ecosystem—operate within a safer, better regulatory framework.”
Digital Services Act
Among the forthcoming changes are reforms outlined in a parliamentary report authored by Liberal Senator Andrew Bragg.
Speaking today at the Australia Blockchain Week conference, the senator said that after a series of consultations, the report reached recommendations covering DAOs, debanking, custody services, taxation, licensing and tokens.
Bragg unveiled a legislative proposal that he says would lay the foundation for a new regulatory regime for digital assets. He described the proposed “Digital Services Act” as a consumer-protection-focused framework built around four core principles.
Those principles are breadth and flexibility, regulation by a dedicated ministry rather than a standalone authority, technological neutrality, and the allocation of government resources and personnel to support implementation.
The effect of DAOs on Australia’s tax base
Senator Bragg noted that Australia relies heavily on corporate taxation—one of the country’s primary revenue sources after income tax. He explained that decentralized autonomous organizations (DAOs) do not currently fit the legal tax definition of a company.
He theorized that a mass migration of businesses into DAO structures could pose an “existential threat to the tax base.” To address this risk, the senator proposes introducing minimum standards for organizations so consumer protections are preserved, protocol rules are standardized, and liabilities are better defined.
Bragg added that requirements for disclosure, auditing and product reliability should be introduced. He argued this is an ideal opportunity to design tax and regulatory measures that encourage the sector’s growth rather than impede it.
Tax status and token mapping
Additionally, the senator proposes assigning the Board of Taxation the task of reviewing digital assets to clarify issues such as the tax treatment of ICOs, staking, central bank digital currencies (CBDCs), airdrops, and play-to-earn gaming, among others. Alongside the Board’s review, Treasury would carry out a token-mapping exercise to classify different digital instruments. This mapping will form a cornerstone of the broader reforms yet to come.