Decentralized autonomous organizations, or DAOs, make some people uncomfortable. Especially this Australian lawmaker.
Australian Senator Andrew Bragg kicked off the Australia Blockchain Week (ABW) conference with a no holds barred legislative proposal that he hopes would lay the foundation for DAOs and Australia’s new digital asset economy.
The Liberal Party member announced a comprehensive piece of crypto legislation – the Digital Services Act (DSA) – aimed at regulating cryptocurrency exchanges, DAOs, and taxing digital assets.
The DSA’s introduction is unsurprising in view of Australia’s recent drive to establish itself as a global leader in blockchain technology.
A Bombshell Assertion On DAOs
The senator, who chaired the Australia as a Technology and Financial Centre Committee last year, did not mince words during the event:
He said that DAOs constitute an “existential threat to the tax base” because they are treated as partnerships and hence exempt from corporate tax:
“They need to be recognized and regulated immediately.”
Bragg explained the rationale for the proposed project by stating that Australia’s reliance on company tax is “unsustainable” in light of the fact that corporate tax only accounts for 17% of total Commonwealth government revenue in the 2020-21 term.
DAO, You Say?
In layman’s terms, a DAO is a company that is decentralized in structure, meaning that its rules are written in a computer program and are governed by shareholders rather than a single leader.
Meanwhile, Australian Treasurer Josh Frydenberg revealed the country’s plans to embrace cryptocurrency advancements in a whitepaper released in December as part of broader reforms to the country’s payment infrastructure.
Crypto total market cap at $1.68 trillion on the daily chart | Source: TradingView.com
Australia is anticipated to receive a report on digital asset taxation, conduct a token mapping exercise, and undertake an examination of DAO regulation by the end of the current year.
Protecting The Masses
Bragg has also stated that his request for regulatory reforms is designed to safeguard the public from malevolent actors and to show to the world that Australia is “open for business.”
Additionally, the proposed measure would create a new category of financial goods known as “digital assets” and establish a licensing bureau for digital asset service providers.
The proposed legislative measure also calls for improvements in critical areas such as crypto market regulation and custody, while also preventing countries such as Russia from using crypto to circumvent financial sanctions.
Sen. Jane Hume, a fellow Liberal Party member and minister for the digital economy, shared during the conference that the government is considering launching a new licensing system that will provide crypto exchanges with a “Australian-made badge of approval” and other related custody standards.
Featured image from CoinGeek, chart from TradingView.com