Australia Slows Down on the Establishment of New Crypto Legislation

The government of Australia appears to be taking its time implementing new cryptocurrency regulations. Internal documents released by the Treasury Department indicated that new laws would take more than a year to be finalized.

The delay may have been caused by the recent exchange failures, particularly the defunct FTX exchange, which cost tens of thousands of Australians their savings.

In December, Treasurer Jim Chalmers and Assistant Treasurer Stephen Jones gave a joint statement that the issuance of a consultation paper in early 2023 to help determine whether digital assets should be governed by financial services legislation, and the creation of suitable custody and licensing arrangements to protect consumers are the next steps in the government’s ongoing “token mapping” work.

Right now, the Treasury said it anticipates that some stakeholders would be frustrated by the perceived delay in the implementation of a licensing regime. Treasury believes, however, that a recent rush to sell cryptocurrency by retail clients has effectively given the government more time to work out legislation.

According to the released documents, the government intends to release consultation papers and hold stakeholder roundtables on licensing and crypto custody rules in the second and third quarters of this year.

Australia Government’s Crypto Mapping Exercise

The Australian government has said it intends to launch a token mapping exercise to determine the sequence in which these digital assets will be regulated. According to the plan, individuals will be able to determine what crypto assets the government will regulate first.

Australian Assistant Treasurer and Minister for Financial Services, Stephen Jones stated that the emphasis is primarily on unregulated digital assets that serve as financial products. Currently, the majority of crypto assets are currently not seen as financial products, leaving a sizable portion of the market uncontrolled.

Meanwhile, the government’s decision to label all digital assets as financial products under the proposed legislation is still up for debate. Although no decision has been taken in this regard, the Commonwealth Bank and the Australian Securities and Investments Commission (ASIC) both fully endorse the proposal.