Australia will introduce new rules for cryptocurrency and buy now pay later systems, which the Treasurer says will make the country a world leader in the space.

Federal Treasurer Josh Frydenberg says a “digital-led revolution” is underway in our financial system, and Australia needs a new regulatory framework to reflect that.

“Things like digital wallets, buy now pay later, cryptocurrencies, they’re fast becoming the norm but our regulatory framework hasn’t really adjusted to those digital technologies,” he told 3AW Mornings.

“We need a regulatory framework that’s fit for purpose so what we’re seeking to do is enhance competition and transparency around it by modernising the payment system so that these new products and services are covered by regulation.”

Mr Frydenberg says Australia will move introduce licensing for digital currency exchanges.

A central bank digital currency, linked to traditional currency, may also be established.

“That’s something we’re investigating – the feasibility of doing it,” the Treasurer said.

“We’ve yet to commit to that, but that’s where other countries are heading.”

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