MasterCard Filed Submission to Senate Inquiry Calling for Lawmakers to Enhance Bitcoin Regulation

MasterCard filed a submission to a Senate inquiry into digital currencies, arguing that Australian regulators should strengthen control over the cryptocurrency.

MasterCard believes that 'all participants in the payments system that provide similar services to consumers should be regulated in the same way to achieve a level playing field for all.' Photo: Chance Agrella/Flickr

MasterCard believes that 'all participants in the payments system that provide similar services to consumers should be regulated in the same way to achieve a level playing field for all.' Photo: Chance Agrella/Flickr

MasterCard petitioned regulators in Australia to reinforce digital currency regulation in a submission filed by Eddie Grobler, MasterCard Australasia Division President.

According to the document, the lawmakers should move against the anonymity of bitcoin transactions and protect users form criminal activities, reports Computerworld.

Grobler noted: “Contrary to transactions made with a MasterCard product, the anonymity of digital currency transactions enables any party to facilitate the purchase of illegal goods or services; to launder money or finance terrorism; and to pursue other activity that introduces consumer and social harm without detection by regulatory or police authority.”

“For Australia to take a market leadership position, it will have to address risks that harm consumers and those that enable criminal behaviours while developing clear and consistent regulation which allow lawful digital currency businesses to flourish,” MasterCard stated.

As an example, MasterCard pointed to the collapsed Mt. Gox exchange. “As we have learned from the experiences emanating from the Mt. Gox Bitcoin exchange collapse, the existence of a ‘block chain’ does nothing to allow law enforcement, other government authorities or the public to identify the real identity of the parties to a digital currency transaction,” the firm stated.

The company also argued against the blockchain technology, noting that “the existence of a block chain does nothing to allow law enforcement, other government authorities or the public to identify the real identity of the parties to a digital currency transaction.”

Although decentralization of bitcoin is often seen as a benefit of digital currency, MasterCard considers the lack of regulation could negatively affect the bitcoin users as nobody will be responsible for the lost or stolen bitcoins. Moreover, there is no any bank or other third party that could back bitcoin value in the crisis period.

The Senate inquiry into digital currencies by the Economics References Committee was established in October and all the submissions closed about a week ago. The Committee will report its results in spring next year.

Meantime, Australian bitcoin wallet provider CoinJar has recently announced that it will move its headquarters from Melbourne to London. The decision to relocate the business to the UK was taken, owing to the unfavorable tax regime in the country. Thus, the authorities demanded 10% of all the digital currency transactions realized within the country.

The Australian Taxation Office treats bitcoin as barter for individuals and as a commodity for businesses, which transact over AU$10,000. While in the UK, trading cryptocurrency does not imply any taxes.

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