Australia’s new government finally signals its crypto regulation stance

Australia's new government finally signals its crypto regulation stance

The Australian Labor Party has finally spoken out three months after it was elected to power.

Treasurer Jim Chalmers announced that a token mapping exercise would be undertaken. This was one of 12 recommendations made in a senate inquiry last year about “Australia as Technology and Financial Center.” Industry has eagerly awaited the report’s acceptance by the ALP government.

The token mapping exercise, which is scheduled to be completed before the end the year, is expected “to identify how crypto assets should be regulated” as well as inform future regulatory decisions.

Cointelegraph has learned that Treasury will also be working on other recommendations, such as a licensing framework to crypto asset service providers who deal in non-financial crypto assets, appropriate safeguards for consumer crypto asset custody, and a review the company-style decentralized autonomous organisation (DAO).

The Albanese-led government, which includes Treasurer Jim Chalmers, Assistant Treasurer and Minister of Financial Services Stephen Jones, and Dr. Andrew Leigh, Assistant Minister for Competition, Charities and Treasury, stated that it is trying to regulate a “largely unregulated crypto sector”.

“As it stands now, the crypto industry is largely unregulated. We need to work to balance the market so that we can embrace innovative technologies.”

According to the statement, more than 1 million taxpayers had interacted with crypto ecosystem since 2018. Yet, regulation is not keeping up with this sector.

According to the politicians, the Liberal-led government that was in power before them had “dabbled” with crypto asset regulation via crypto secondary service providers, “without first understanding” what was being regulated.

“The Albanese government is more serious about identifying what is in the ecosystem, and what needs to be addressed first.”

Michael Bacina, a partner at Piper Alderman, stated that the token mapping exercise would be an “important step” to close the education gap between policymakers and regulators.

He said that “Australia is a leader in blockchain technology right now, but we have seen uncertainty about regulatory requirements lead to businesses moving out of Australia.”

Related: Australia’s crypto laws are world-leading: The inside story

He said, “An intelligent token mapping exercise that helps regulators and policymakers understand in detail the activities they are looking at regulating and how technology interacts with them should help regulation to be fit for purpose and both assist innovation and jobs in Australia while protecting customers.”

Caroline Bowler, CEO at BTC Markets, said that the move reflects calls from many within the industry for “proportional and appropriate regulation” of this sector.

Token mapping has many additional benefits. She stated that it will give crypto investors more clarity; assist companies in developing blockchain-based innovations; guide digital currency exchanges; and help regulators to create a suitable regulatory regime.”

Dr. Aaron Lane is a senior lecturer at RMIT Blockchain Innovation Hub and believes that the token mapping exercise by Labor government is a delay tactic.

“Progress is good, but we need to make progress on the path to more regulatory certainty for the industry and better protections for consumers.

He said, “Unfortunately they have had to buy themselves some time with a token mapping exercise in order to get up to date.”

Progress is progress. It isn’t the first token mapping that has been done. This is an example of token mapping from the UK in 2019. #cryptolaw https://t.co/rghWmklDJv
Aaron Lane (@AMLane_au), August 21, 2022

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