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The Australian government will negotiate major changes to the future-oriented payment system regulatory framework.

2022 is the year of the tiger. The Australian government announced on December 8, 2021 that it will implement "the most significant reform of the Australian payment system in 25 years" next year to reflect this spirit. A positive timetable has been established, and these reforms will change Australia’s payment system and build on Australia’s digital economy strategy.

Government responds to payment review

Details of how the government intends to initiate these reforms can be found in its response to each of the recommendations in the following major review of Australia’s current payment system regulatory framework. These are all recently completed:

These three comments made 41 suggestions among them. Most were accepted-the government only rejected two.

The reform will be roughly divided into two stages. The most urgent and immediately implementable reforms will be negotiated in the first half of 2022, and the rest will be negotiated before the end of 2022.

Although many people in the industry do not expect to receive a response from the government until the new year, the government's response is swift and decisive. By accepting almost all the recommendations made in the three reviews, including establishing a financial market licensing system for digital currency exchange providers, it shows that this area is a priority. The government will also consult on the extension of Australia's stringent regulatory requirements to digital asset holders and a new payment licensing framework.

The government’s goal is to advance key projects in accordance with the following schedule:

Consultation completed by the end of 2022

This means that by the end of 2022, Australia may see an updated and updated financial supervision and payment system to adapt to the future, "put it among the few leading countries in the world" (from Hon Josh Frydenberg MP) To Australia-Israel Chamber of Commerce, Melbourne).

The reforms will be guided by the industry, led by Josh Frydenberg and Senator Andrew Bragg, who will chair Australia's Senate Special Committee as a technology and financial center.

Much needed change-but balance is key

These changes in Australia's regulatory and licensing areas will provide much-needed clarity and guidance for suppliers, and provide consumers with assurance and confidence.

The government's rapid response to the three reviews and the willingness to advance some key projects by mid-2022 reflect the growing voice of Australia (from regulators, industry, consumers, etc.) that there is an urgent need to update the Australian payment system framework. However, despite the increasing pressure to implement the new system as soon as possible, it is crucial that the reform is practical and easy to manage.

The consequence of the fast-tracking of fragmentary changes in the Australian financial services regulatory system has led to the arduous task of investigating and simplifying the regulatory framework for financial services by the Australian Law Reform Commission.

Importantly, the proposed reforms will not add further complexity. Instead, the government should take this opportunity to formulate clear and simple regulations to prove that Australia's regulation of payment systems and digital assets is future-proof. If the government can do this, the new system will mark an important development not only for Australia but also for the global payment and crypto/digital asset community.

Together with our clients and other industry participants, we are preparing for the upcoming consultation and legislative changes in early 2022. We encourage participation in government consultations and will provide further updates when the government consultation documents are released. If you need any help, please contact us.

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