Australia should provide a clearer legal framework for the crypto industry, according to a Senate committee. It proposed 12 recommendations to achieve this in its final report.

Two Australian crypto exchanges had already received licenses in Singapore and the UK, the report warned, “showing what Australia is missing out on by not developing an appropriate framework”.

Decentralised Autonomous Organisations (DAOs) should be recognised as legal entities under the Australian Companies Act, said the Select Committee on Australia as a Technology and Financial Centre (ATFC). The DAO legal entity in practice would “operate similar to a limited liability company”.

The report also recommended a licensing regime for crypto exchanges, which lays down capital adequacy requirements, rules on auditing and tests for identifying responsible persons.

A token mapping exercise should help the government “to determine the best way to characterise the various types of digital asset tokens in Australia.”

The committee also wants crypto mining companies to benefit from a 10% tax discount if they use renewable energy for their mining activities.

Other recommendations included a policy review of the viability of an Australian CBDC, the establishment of a custody/depository regime, clarification on KYC/AML rules (in particular FATF’s travel rule), amendments to tax rules and clear procedures for business that are de-banked due to the perceived risk of their (crypto) activities.

25% of Australians “either currently or have previously held cryptocurrencies, making Australia one of the biggest adopters of cryptocurrencies on a per capita basis”, the report quoted from surveys.