While Australians have been very supportive of crypto adoption, the regulators are keen on having an efficient and transparent regulatory framework for the sector.
On December 14, Jim Chalmers, the Australian Treasurer since May this year, revealed that the government is all set to release a consultation paper of its token mapping initiative in early 2023.
The Australian regulators and enforcement agencies have significantly focused on the crypto sector following the FTX fiasco. The government has repeatedly stressed the importance of providing rigid and efficient consumer protection laws as soon as possible.
In his statement, Chalmers revealed that the government, under the leadership of Anthony Albanese, is taking action to “improve the regulation of crypto service providers and ensure additional safety for Australians.”
According to Chalmers, this consultation paper is a part of the process and will cover information regarding how certain crypto assets should be regulated alongside frameworks for licensing of firms, asset custody, and consumer protection under its aforementioned token mapping practice.
Chalmers said: “The next steps in the Government’s ongoing ‘token mapping’ work will include releasing a consultation paper in early 2023 to inform what digital assets should be regulated by financial services laws, and developing appropriate custody and licensing settings to safeguard consumers.”
He added that after the release of token mapping, “the government will consult on a custody and licensing framework next year before introducing the concerned legislation.”
The recent comments from the Treasurer follow up on the Treasury’s promise from mid-November of developing and enacting an efficient and robust regulation for crypto by 2023.
Australia’s focus on crypto is also a step towards its efforts to modernize the existing financial system given the government set reform regulations on financial market infrastructure- significantly those relevant to the Australian Securities Exchanges’s (ASX’s) clearing system, payment systems, and the “Buy Now Pay Later” sector.
The government in Australia has been a big crypto advocate but has been cautious. It has reiterated the importance of innovation while prioritizing public safety.
On December 8, the Reserve Bank of Australia (RBA) published a stablecoin-focused report. Its report highlighted the contribution of the regulators as they are “undertaking significant work” to figure out how to integrate them into the ecosystem safely. The report advocated for stablecoins stating that they have the potential to enhance the efficiency and functionality of a range of payments and other financial services.