OzTech: Australia seeks to regulate cryptocurrency; Sydney Tech precinct’s build drags on; New data centres coming to Australia

Senate committee wants the federal government to regulate cryptocurrency 

The Senate Select Committee on Australia as a Technology and Financial Centre has published its final report with 12 recommendations that include the regulation of digital assets such as cryptocurrency in Australia, ‘de-banking’ (when a bank chooses to no longer offer banking services to a customer), practices affecting local fintechs and other businesses.

The recommendations are: 

1. That the Australian government establish a market licensing regime for digital currency exchanges, including capital adequacy, auditing, and responsible-person tests under the Treasury portfolio.
2. That the Australian government establish a custody or depository regime for digital assets with minimum standards under the Treasury portfolio.
3. That the Australian government, through Treasury and with input from other relevant regulators and experts, conduct a token-mapping exercise to determine the best way to characterise the various types of digital asset tokens in Australia.
4. That the Australian government establish a new Decentralised Autonomous Organisation company structure.
5. That the Anti-Money Laundering and Counter-Terrorism Financing regulations be clarified to ensure they are fit for purpose, do not undermine innovation, and consider the driver of the Financial Action Task Force travel rule.
6. That the Capital Gains Tax (CGT) regime be amended so that digital asset transactions create a CGT event only when they genuinely result in a clearly definable capital gain or loss. 
7. That the Australian government amend relevant legislation so that businesses undertaking digital asset mining and related activities in Australia receive a company tax discount of 10% if they source their own renewable energy for these activities.
8. That the Treasury lead a policy review of the viability of a retail Central Bank digital currency in Australia.
9. That the Australian government, through the Council of Financial Regulators, enact the recommendation from the 2019 ACCC inquiry into the supply of foreign-currency-conversion services in Australia that a scheme to address the due diligence requirements of banks be put in place, and that this occurs by June 2022.
10. That, to increase certainty and transparency around de-banking, the Australian government develop a clear process for businesses that have been de-banked. This should be anchored around the Australian Financial Complaints Authority, which services licensed entities.
11. In accordance with the findings of government advisor Scott Farrell’s recent payments system review, that common-access requirements for the New Payments Platform be developed by the Reserve Bank of Australia, to reduce the reliance of payments businesses on the major banks for the provision of banking services.
12. That the Australian government establish a Global Markets Incentive to replace the Offshore Banking Unit regime by 2023.

Sydney Tech precinct’s build drags on

There remains no date for the delivery of Sydney’s Tech Central, the technology hub expected to create 25,000 jobs. Atlassian’s new headquarters there has only just been approved.

The precinct was announced in 2018, and Atlassian is the anchor tenant. The Australian tech company plans to build a 40-storey building, which resulted in the rezoning of the Parcel Post building. The construction of the Atlassian building, worth $546 million, is expected to begin in the first half of 2022 and finish in 2026.

In August 2021, the New South Wales government announced the Quantum Terminal, the first collaboration space of the precinct. At the time, a spokesperson said there was no date for the construction to be finalised due to the COVID-19 restrictions.

New data centres coming to Australia

DCI Data Centres has announced plans to build a data centre in Darwin, Northern Territory. DCI says Darwin is a strategic location with international and country-wide network connectivity as well as being the command hub in the north for Australian defence and coastal border forces and hosting US Defence Force technical and aerial assets. The development is waiting approval, but the location can support 10mW of IT load.

Meanwhile, Equinix has already started the build of two hyperscale data centres in Sydney, expected to provide more than 55mW of power capacity. The company announced a $770 million joint venture with PGIM Real Estate to continue the development of the data centres. As a result, PGIM Real Estate will own an 80% equity interest in the joint venture, and Equinix will own the remaining 20% equity interest.

Equinix has 17 International Business Exchange (IBX) data centres in Australia, which will increase to 18 when PE3 in Perth opens later in 2021.