This September, Australia’s Select Committee on Financial Technology (FinTech) and Regulatory Technology (RegTech) released an interim report containing a series of recommendations, a year after the Committee was created. Apart from blockchain, it explores how FinTech and RegTech can provide opportunities for Australian consumers and businesses. Additionally, it investigates the financial sector’s barriers to using new technology and current initiatives’ effectiveness.
Committee Chair Senator Andrew Bragg recognizes the importance of this report due to the pandemic, which means Australia faces its first recession in 30 years. The report itself acknowledges how new technology could greatly help during the pandemic crisis and Australia’s recovery period. It examines areas such as virtual signature and witnesses to legal documents regulations. Plus, it explores a digital identity framework across government agencies, telehealth and digital prescriptions.
The Committee was introduced to blockchain’s potential, which has been estimated to reach AUD 3 trillion($2.18 trillion) by 2030. Michael Bacina, a partner of Sydney-based FinTech firm Piper Alderman, told the Committee he believes most FinTech and RegTech projects will be predominantly built on either blockchain or distributed ledger technology (DLT) within the next ten years. Other businesses and academics concurred, urging the government to use blockchain and DLT in property investment, mortgage transactions, and government property data.
The report admits that the very success of FinTech and RegTech startups in Australia often relies upon the startup’s ability to navigate through the complex regulatory environment. Currently, regulation is ‘outdated’, ‘complicated’, and in some instances, ‘contradictory.’ With an increasing number of FinTech and RegTech firms using blockchain, its vital Australia’s regulations address the new technology as soon as possible.
Recommendation 28 of the interim report advises the government to ‘undertake a stocktake’ to understand the ‘costs and complexity’ for small businesses. Other recommendations include providing ‘further clarity’ and ‘certainty’ around their tax incentives, and establishing a new body to ‘consolidate regulatory responsibilities.’ Multiple recommendations encourage the government to look at promoting the research, development, and use of new technologies, of which blockchain and DLT would most certainly be a part.