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Australia’s new centre-left government has announced it is ready to start consulting on a framework for the regulation of the crypto asset sector for industry and regulators.
Newly-elected Prime Minister Anthony Albanese wants to improve the way Australia’s regulatory system manages crypto-assets, to keep up with developments and provide greater protections for consumers, Australia’s competition and financial services ministers announced jointly on Monday (Monday 22).
“Australians are experiencing a digital revolution across all sectors of the economy, but regulation is struggling to keep pace and adapt with the crypto-asset sector,” lawmakers Stephen Jones and Andrew Leigh said in the statement.
Currently, crypto operates almost entirely unregulated in the G20 nation.
However, the Australian Taxation Office estimates that more than 1m taxpayers have interacted with the crypto-asset ecosystem since 2018. “We need to do some work to get the balance right so we can embrace new and innovative technologies while safeguarding consumers.”
Echoing regulators in the UK, Spain and Singapore, Australia’s government acknowledged that the use of crypto-assets is experiencing “increasingly widespread proliferation”.
This is to the extent that “crypto advertisements can be seen plastered all over big sporting events”, meaning that there is a “need to make sure customers engaging with crypto are adequately informed and protected”.
As the first step on the reform agenda, Australia’s Treasury department will prioritise “token mapping” work in 2022, to understand the characteristics of different cryptocurrencies. This will help identify how crypto-assets and related services should be regulated.
This type of work has not been done by any other government, which the Albanese administration says will make the country a leader for regulation.
The previous government, which was voted out earlier this year, also had begun to see crypto as a priority, with a consultation that closed in late May, and had hinted at a lax regulatory framework.
The new government took the opportunity to make a dig at former Prime Minister Scott Morrison’s administration in its announcement, stating that: “The previous government dabbled in crypto-asset regulation but prematurely jumped straight to options without first understanding what was being regulated.
“The Albanese government is taking a more serious approach to work out what is in the ecosystem and what risks need to be looked at first,” the announcement says.
Coinciding with the government’s announcement, the Australian Securities and Investments Commission (ASIC) has also identified crypto-assets as a priority in its annual plan.
ASIC has said that it will be taking enforcement action to protect consumers from harms associated with crypto-assets, including those that mimic traditional products but seek to circumvent the regulation, and intends to raise public awareness of the risks inherent in crypto-assets and decentralised finance (DeFi).
