Digital currencies are changing the global payments landscape and are under a spotlight in Australia. As such, PayPal lodged a submission to the Senate’s Digital Currency Inquiry in Australia on 24 December 2014. PayPal’s submission highlighted that there is a clear distinction between Digital Wallets (e.g. PayPal) and Digital Currencies (e.g. BitCoin). Digital Currencies provide innovation and market opportunities; however they appear to be currently escaping regulatory frameworks in Australia and in other jurisdictions.

PayPal’s key recommendations:

• Digital currencies should be clearly defined and regulated and recognised as financial instruments - this would facilitate more certainty and clarity of digital currencies and create more consumer protection.
• Technology-neutral regulation is preferable to ensure innovation is not stifled.
• A registration process and licensing regime could be applied to companies providing digital currency financial services in Australia.
• Regulators such as AUSTRAC, the Australian Securities and Investments Commission and the Reserve Bank of Australia could regulate digital currency financial services companies and provide effective regulatory oversight and prudential supervision of the development of digital currencies in Australia.
• Digital currency financial services companies at a minimum should be subject to the AML/CTF Act.

View PayPal's submission.