Today, Australia unveiled a proposal to regulate platforms that offer digital asset services as the nation ramps up its attempts to “provide clarity” and “protect customers.” Failures and vulnerabilities of these platforms have “increased the need for regulation to protect consumers,” according to a consultation paper from the Australian Treasury.
The government intends to make use of current financial services regulations in Australia. A platform will need to obtain an Australian Financial Services Licence if its assets reach a particular amount, which will be either AU$1,500 ($948) for an individual or AU$5 million ($3.2 million) collectively.
The regulators specifically want to enforce a certain duties, like establishing regulations for token transactions and standards for custody software. Additionally, the proposal would impose new requirements on fundraising, trading, staking, and other activities.
On December 1, 2023, the document’s consultation period will end.
The introduction of a consultation process by the Treasury today is welcome, according to Jonathon Miller, managing director of Kraken Australia, who spoke with The Block. “Australia is currently in the unfortunate position where our regulatory process has taken a very lengthy time, so we’re adopting the route of shoving cryptocurrency into the framework of already-existing financial services regulation. I understand the necessity to have something in place locally to provide platforms like ours assurance because we lag behind our global peers in putting in place a crypto architecture.
However, the strategy, according to Miller, offers several opportunities for the regulation to neglect the complexities of the technology. I’m optimistic that we can cooperate with the government to ensure
We don’t snuff out the advantages of upcoming breakthroughs in cryptocurrency that might not fit neatly into the category of traditional “financial services,” he continued.
The Australian government’s proposal, according to Angela Ang, senior policy advisor at blockchain intelligence company TRM Labs and a former official at the Monetary Authority of Singapore, is “a thoughtful way to apply existing legal and regulatory constructs to crypto assets that take into account their unique characteristics, as well as alignment to international standards.”
Australian institutions have started to grow more wary of the dangers of potential cryptocurrency frauds. To protect its consumers, National Australia Bank declared in July that it had stopped some payments to “high-risk” bitcoin exchanges. The Commonwealth Bank of Australia also took a position in June.
Due to cryptocurrency-related scams, efforts have been taken to restrict clients’ ability to send money to crypto exchanges.