The Australian Transaction Reports and Analysis Centre (Austrac) will be monitoring all cryptocurrency exchanges in the country. Austrac is actually the financial intelligence agency in Australia. Consequently, all cryptocurrency exchanges that operate in the country will have to register with the authority and will be placed on a dedicated register.

Furthermore, local media reported that the cryptocurrency exchanges will have to counter the risks of money laundering and terrorism. They will also need to put in place some procedures to verify customers' identity and keep reports for no less than seven years. The aim of this regulation is to reduce the potential of illicit activity linked to cryptocurrencies.

Australian Senate and House of Representatives approved the new legislation

The Australian Senate approved the plan by passing the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill. The vote occurred on Wednesday and Thursday in both the Australian House of Representatives and the Senate. The proposal for this amendment was first introduced in August, 2017.

Exchanges will implement programs to identify clients

Under the new bill, all exchanges need to implement a program to identify their clients and such as banks, they have to report suspicious transactions and transactions involving physical currency that exceed AUD 10,000.

New law defines cryptocurrencies

According to the new law, digital currencies are digital representations of value that function as a medium of exchange, a store of value or a unit of account. The digital currency can be used for the supply of goods or services, under the new legislation.

Shortly, this means that exchanges are treated the same as banks when it comes to exchanging cash. The new legislation makes Australia one of the few countries, including Japan, which have amendments to tax and justice laws regarding cryptocurrencies. This is believed to a step to bring legitimacy to exchanges operating cryptocurrencies.