National security on the agenda as Senate inquiry into bitcoin announces terms of reference

The Senate Economics References Committee has released its terms of reference for its inquiry into bitcoin, with incorporating “digital currencies into Australia‘s national security framework” being on the agenda.

StartupSmart first reported news of the inquiry in mid-September. It was officially announced on Thursday, October 2, and will be chaired by NSW Labor Senator Sam Dastyari.

The official terms of reference for the inquiry, released today, are as follows (emphasis added):

Digital currency, with particular reference to:

(a) How to develop an effective regulatory system for digital currency that:

(i) ascertains the most appropriate definition of digital currencies under Australian tax law

(ii) promotes competition and growth of the digital currency industry

(iii) ensures ongoing stability in the financial services industry

(iv) secures protection of consumers and businesses against illegal activity

(v) incorporates digital currencies into Australia‘s national security framework, and

(vi) ensures the financial stability of the industry

(b) The potential impact of digital currency technology on the Australian economy, including the:

(i) payments sector

(ii) retail sector, and

(iii) banking sector

(c) How Australia can take advantage of digital currency technology to establish itself as a market leader in this field; and

(d) Any other related matters.

Ronald Tucker, the chairman delegate from industry lobby group ADCCA (Australian Digital Currency Commerce Association) told Private Media he “absolutely welcomes” both the inquiry and its terms of reference.

“It’s a good chance to discuss the opportunities for Australia to participate in the opportunities around the emerging fin tech sector,” Tucker says.

“We will be attending and giving testimony, and we will also submit our financial services inquiry testimony.”

As StartupSmart previously reported, ADCCA advocated both industry self-regulation and changes around the tax treatment of bitcoin by the Australian Tax Office.

Tucker also says there are good reasons why national security could be on the agenda.

“I think what they’re referring to is making sure sufficient mechanisms exist to ensure anti-laundering and counter-terror process can be followed by law enforcement and intelligence,” he says.

“So if there is anything that needs to be investigated, the processes are in place to allow that to happen.

“What’s great about the bitcoin is many of these features that allow you to track transactions are built right into the protocol and available to be looked at by anyone who has a computer.

“So by having this conversation early on, we can have a discussion to see what processes and protocols they need.”