The Australian government wants to revise the Anti Money Laundering (AML) act that would create a better ecosystem for cryptocurrency innovation.

A statutory review of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 has been released by the Australian Attorney General’s Department (AG). The AG has recommended better implementation of digital wallets and digital currencies in the act.

According to the recommendations by the AG, the AML Act be amended to ensure that digital wallets are comprehensively captured. Some digital wallets are already into the act which are considered to be ‘accounts’ given by traditional financial product providers like banks.

Additionally, in the recommendations, there is a plan to broaden the definition of “e-currency” to include convertible cryptocurrencies like bitcoin. The revision is only for those currencies which not backed by a physical “thing”. Physical commodity such as bullion or mainstream currency which backs digital currencies are already caught by the AML Act.

The Australian Transaction Reports and Analysis Centre (AUSTRAC) and the AG develop an appropriate model for applying obligations under the AML Act. This act applies to those who have a geographical connection to Australia.

While cryptocurrencies pose both advantages and risks, the Australian government wants to revise the AML Act to ensure that this ecosystem can prosper under the new guidelines. The AML act recommendation is no guarantee for being implemented in its current form and companies dealing with Bitcoin will be subject to further regulation in Australia.