In Australia, there seems to be strife between crypto executives and government officials based on a comment from the latter.
On Sunday, an interview in the local daily featuring Stephen Jones, Assistant Treasurer and Minister for Financial Services, sparked a difference of opinion between the aforementioned groups. The article covered the updates from the Treasury official regarding the status of crypto regulation in the country.
Jones, in the interview, stated that he was not very convinced with the idea of setting up an entirely new set of regulations for something that, in his opinion, is a “financial product.” The crypto executives feel this opinion to be highly problematic and have warned against putting all digital assets in the same category as financial products.
An executive of a crypto exchange stated that previously the assistant Treasurer confirmed that the government was proceeding with its “token mapping” initiative this year to determine which crypto assets to regulate. In addition, a consultation process with the industry regarding the subject was expected “to start soon.”
However, Jones also addressed the consultation process in his interaction. He said:
“I don’t want to pre-judge the outcomes of the consultation process we are about to embark on. But I start from the position that if it looks like a duck, walks like a duck, and sounds like a duck, it should be treated like one.”
Jones also elaborated that other coins or tokens are being essentially used as a store of value for investment and speculation, which he calls a valid point, for they must also be treated like a financial product.
Sources reveal that the Australian Securities and Investments Commission (ASIC) and Commonwealth Bank, one of Australia’s big four banks, have also supported regulating crypto as a financial product.
However, crypto market participants are strictly against labeling crypto assets as financial products and have urged caution over a broad-stroke approach toward crypto assets.
Michael Bacina, blockchain and digital asset lawyer, said that a broad approach of classifying a technology as a financial product without a clear and usable pathway to licensing and compliance would bring troubles to crypto companies and eventually create more risk.
Adam Percy, general counsel for the Australian crypto exchange, expressed the same sentiments. He said:
“The trick is to protect consumers without regulating away well-run domestic digital asset businesses and forcing people to use off-shore exchanges subject to less rigorous checks and balances.”
While many crypto advocates have opined that over-regulation would be problematic for the industry and Australia’s pioneering role toward crypto, Jones said that the collapse of the crypto exchange FTX puts the question of the need for crypto regulation “beyond doubt.”
The crypto lobby group “Blockchain Australia” said that if all crypto assets were classified as financial products, it would harm investments and innovation and eventually result in the loss of industry-related jobs.
Australians have been highly supportive of crypto and have heavily invested in it. However, the reaction of authorities has been mixed. A survey suggested that crypto was voted the second most popular investment choice. The popularity of crypto has been growing worldwide lately as another survey from eToro suggested that women have been highly investing in cryptocurrencies making it the second most owned asset by them after cash.
In July last year, Todayq News reported that during their electoral campaigning, the Australian government in power, The Labor Party, also vowed to be extra vigilant and pay special attention to the local cryptocurrency industry, but their prime minister Anthony Albanese acknowledged implementing a framework that would provide an amiable scope of innovation while addressing the widespread concern of regulation enforcement.
Philip Lowe, governor of the Australian Central Bank, also opined that a private sector solution for crypto is a better option but needs to fulfill one condition. Regulators and regulatory actions must mitigate all risks.