Australia plans on overhauling its digital asset regulations in 2023, setting the stage for comprehensive regulation and licensing of digital asset firms, the country’s Treasury announced this week.
The move comes at a time when lax regulations have been blamed for losses incurred by thousands of Aussie investors following the collapse of FTX Australia, the local subsidiary of Sam Bankman-Fried’s collapsed exchange. Despite being licensed by the Australia Securities and Investment Commission (ASIC), the exchange was closely intertwined with the parent company, and investors had little protection.
“The Albanese Government is also taking action to improve the regulation of crypto service providers and ensure additional safeguards for Australians,” Treasurer Jim Chalmers stated.
In August, the Aussie government announced that it would conduct a token mapping exercise to categorize all digital assets in the country and then determine which falls within the existing financial services laws.
In the latest announcement, Chalmers revealed that the token mapping will include the release of a consultation paper in early 2023 “to inform what digital assets should be regulated by financial services laws, and the development of appropriate custody and licensing settings to safeguard consumers.”
The consultation paper, which invites feedback until February 6, delves into stablecoins, digital wallets, and even central bank digital currencies (CBDC).
After token mapping, the Aussie government will consult on custody and licensing framework in 2023 before introducing legislation, Chalmers revealed.
Since taking over as Prime Minister this year, Anthony Albanese has positioned his government as tech-friendly, pledging to clean up the regulatory mess that the previous regime left. Chalmers alluded to this mess, saying the Aussie government has sat on its hands as technology evolved globally.
“The one constant in finance is change. It’s fast moving, dynamic and our regulatory frameworks haven’t kept up. Our reforms are about starting to fix that in pursuit of a financial system that is stronger and more secure,” he said.
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