The Australian government has announced it could take until 2024 or beyond to release any concrete legislation for the crypto sector, according to documents obtained by The Australian Financial Review. The government aims to release consultation papers in the second quarter of 2023, with stakeholder roundtables on crypto licensing and custody in the third quarter. Final submissions to the cabinet are not expected until late in the year, leading to frustration from crypto businesses and consumer groups over the delay in implementing a licensing regime.
“For example, consumer groups seeking immediate protections and businesses seeking regulatory legitimacy,” according to a brief from Australian Treasurer Jim Chalmers.
However, the government believes that the recent collapse of FTX has weakened demand for cryptocurrencies, which could give it more time to hash out regulations. The government has also created a dedicated “crypto policy unit” within the Treasury department. The crypto policy unit has flagged possible requirements for crypto licenses, including “fit and proper person” tests, capital requirements, and obligations to report bad actors and scams in the industry. The unit also discussed beefing up consumer protections.
The delay in legislation comes as the Australian crypto industry grows. A survey from Australian crypto exchange Swyftx revealed that approximately one million Australians planned to purchase cryptocurrency for the first time over the next 12 months, bringing total crypto ownership in the country to over five million.
Despite the delay, the Australian government is taking steps to address the crypto industry. “The Australian Government recognizes the significant opportunities presented by cryptocurrencies and blockchain technology, and the importance of taking a considered and well-informed approach to the regulatory and policy implications of these emerging technologies,” said the government in a statement.
The delay in legislation could be seen as a missed opportunity for Australia to establish itself as a crypto-friendly destination for businesses and investors. However, the government believes that taking the time to get a full picture of the industry will lead to more effective and meaningfulh regulation in the long run.