Blockchain is a distributed ledger technology (DLT) originally conceptualised to facilitate the trading of the bitcoin cryptocurrency. In a nutshell, blockchain allows for the tracking of digital assets so that they can be verified as authentic and cannot be copied without permission.
Since then, the immutable record of transaction has found itself tangled up in a regulatory delegation-fest between government organisations in Australia, with eight different government bodies overseeing blockchain development to some degree in the country.
Australian Transaction Reports and Analysis Centre (AUSTRAC) is one organisation involved in blockchain regulation, along with the Australian Securities and Investments Commission (ASIC), the Reserve Bank of Australia (RBA), the Australian Tax Office (ATO), the Australian Prudential Regulation Authority, the Australian Competition and Consumer Commission (ACCC), the Office of the Australian Information Commissioner, and the Digital Transformation Agency.
According to Bradley Brown, acting deputy CEO of International & Policy at AUSTRAC, despite not having a central blockchain and DLT governing body, inter-agency engagement to sort out the regulatory requirements is “definitely” occurring.
“We are definitely working with individual businesses on different elements that are relevant in our space and I dare say other government agencies would be doing the same,” Brown told ZDNet at CeBit Australia in Sydney on Wednesday.
“I think what we’re trying to do as regulators is actually really bring that together so when we speak, we don’t speak as individuals.
“You have to walk before you run and I think that’s where we’re really moving to.”
Despite the eagerness of Brown and his colleagues in other agencies to see the technology used within the government, the timeframe in which citizens and customers can expect to be transacting via DLTs is not yet visible.
“I don’t think it’s in the near future,” Brown said. “I think we’re still ways away until big-business really grapples with and implements things that are going to have that sort of wide scale societal impact.”
But when it does, Brown thinks the flow-on economic benefit for business and for government, will actually be achieved.
Governments have historically balanced opportunities with challenges and risks when it comes to emerging technologies, and Brown would argue there’s a changing of the guard.
“Government is far more forward leading and particular agencies are more forward-leading in terms of engagement with business in relation to a product which is immature,” he said.
“I think increasingly, people will be seeing government, whether that be regulators or government agencies, engage to try and unlock the potential which is there.”
With AUSTRAC concerned mainly with the potential for criminal misuse of DLT, Brown refused to answer if his organisation should take on the role of being the centralised authority charged with the technology in Australia.
Standards Australia was charged with managing the secretariat of an international technical committee for the development of blockchain standards by the International Organization for Standardization (ISO) in September.
Along with 16 ISO member bodies including Germany, the United States, the United Kingdom, France, Canada, Estonia, Japan, and South Korea, Australia will facilitating the development of ISO/TC 307 Blockchain and electronic distributed ledger technologies.
Digital currency providers in Australia are not regulated under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) requirements, but Brown said that’s certainly something the government is also considering changing.
In delivering its 2017-18 Budget earlier this month, the federal government announced it will be aligning the GST treatment of digital currency, including bitcoin, with regular money as of July 1, 2017.
While the general public outside may have heard of the technology thanks only to underground marketplace Silk Road, Brown doesn’t think the cryptocurrency, and as a result blockchain, has been tainted by the association with illegal activities.
“I think mums and dads, ultimately when we start to socialise the technology, will actually change the use case of them and that’s what businesses are attempting to do,” he said. “I think it’s just natural progression. It’s unfortunate that what we reflect on is the negative, not the potential.”
Similarly, Dr Rhys Bollen from the New South Wales Department of Finance, Services and Innovation hit the proverbial nail on the head when it comes to blockchain’s reputation being tarnished.
“I’m not sure my mother could explain how her Visa card works, she just knows it works. I suspect blockchain is actually going to be invisible to most consumers,” Bollen said, in response to a question from ZDNet.
“Someone will come up with a new way of buying things and if it’s better than the status quo, commercial enterprise will make a success of it and my mother still won’t know exactly how it works.”