An Australian senator has proposed a bill to regulate the availability of China’s central bank digital currency (CBDC) for domestic use.
Andrew Bragg, an Australian senator from New South Wales, has drafted a bill to regulate the country’s crypto market. Under the new cryptocurrency legislation, the senator proposes to “prepare the country for the widespread use of the digital yuan.”
Bragg proposes strict reporting requirements for banks that could potentially make the e-CNY available in Australia. The senator singled out seven Chinese banks with branches in Australia that could potentially facilitate the use of the digital yuan in the country. The bill mandates requirements for these banks, including disclosure of information such as:
- the number of Australian businesses that have accepted payments using digital yuan;
- the total amount of e-CNY held in digital wallets of Australian customers;
- details of all e-CNY transactions by Chinese financial institutions operating in Australia.
The bill would impose fines on individuals or entities that violate the reporting requirements.
The bill primarily aims to prevent the widespread use of Chinese CBDC in Australia. Bragg said using the e-CNY outside of China could give the state “enormous power, economic and strategic power,” which in turn could devalue the benefits of Australia’s CBDC.
As a reminder, the Australian central bank digital currency pilot was launched in August this year to explore options for the use and potential economic benefits of CBDC.
“Digital Assets (Market Regulation) Bill 2022” also includes strict requirements for the cryptocurrency market as a whole:
- introducing mandatory licenses for crypto exchanges and custodial services;
- availability of mandatory reserves in local and foreign currencies for all cryptocurrency firms;
- providing data from digital asset service providers and stablecoin issuers on all their transactions;
- ensuring full transparency of all cryptocurrency firms, including disclosure of their clients’ funds.
China began cross-border trials of e-CNY back in late 2021. However, lawmakers in other countries are very cautious about the possibility of widespread use of the digital yuan. For example, nine U.S. senators recently introduced a bill to combat China’s CBDC.
At the same time, China’s financial sector continues to actively integrate the e-CNY. The CBDC is already being used to make payments on household deposits, arrange insurance, and issue large loans in China. Over 4.5 million merchants accept the e-CNY as a payment, and the volume of transactions in the digital yuan exceeds $73 million in Guangzhou alone.
