MasterCard calls on Australia to introduce level playing field for crypto currencies

MasterCard calls on Australia to introduce level playing field for crypto currencies

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.

The firm 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."

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.

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.

Read MasterCard's submission here:» Download the document now 1.3 mb (PDF File)

Comments: (4)

Max Excell
Max Excell - GBGroup - Chester 02 December, 2014, 17:17Be the first to give this comment the thumbs up 0 likes

Another cry for regulation from one of the world’s largest financial services firms. Regulation shouldn’t be viewed as a way to prevent ease of business, rather a way of assisting it. In the words of Mastercard, it not only is a way “to prevent criminal activities.. [but also to ensure] safety, stability and reliability for consumers.” Australian regulators need to factor in the danger of losing valuable up and coming Fintech organisations to more flexible overseas regulators and tax regimes.

Mark Mixter
Mark Mixter - Open Text - Chicago 03 December, 2014, 03:161 like 1 like

I agree regulation has it's place, given the staggering dangers of an un-fettered marketplace.  That being said, what would the reduction to Bitcoin's current value be if it had to shoulder the same regulatory infrastructure as MasterCard, Visa, etc?

Jan-Olof Brunila
Jan-Olof Brunila - Swedbank - Stockholm 03 December, 2014, 08:54Be the first to give this comment the thumbs up 0 likes

Unregulated payment services have already been adopted by serious crime. In Sweden the narcotics combat police force state that in almost all larger drug deals they encounter bitcoin is used as means of payment since it is unregulated and anonymous, no KYC, no AML rules apply and it is not bulky as cash is. The regulatory regieme is a must also to protect society from the expansion of serious crime and tax evasion and not only for the reason of the level playing field in competition between different payment services.

A Finextra member
A Finextra member 04 December, 2014, 01:17Be the first to give this comment the thumbs up 0 likes

1. Cold hard cash is still the #1 choice for criminal activities with as-near-as-makes-no-difference 100% market share. Shouldn't we ban this first?

2. You can't subvert KYC/AML with alt currencies as you must comply at the point of exchange.

3. Security advisory firms will not hessitate in saying that the #1 threat today is from government agencies, not criminal organisations.

4. Greater regulation means more exclusion due to higher hurdles for the 2.5 billion population currently unbanked . We must have secure financial services that are almost free or we will continue to punish the rest of the world for being poor.