Australia’s new government finally signals its crypto regulation stance

Jamal Molla
Written By Jamal Molla
Jamal is an English teacher and freelance writer with a passion for NFTs, metaverse, crypto and technology.

Australia’s new government finally signals its crypto regulation stance after being sworn in to power barely three months ago. The Australian government’s stance on cryptocurrency was made known in an announcement by Treasurer, Jim Chalmers. Chalmers announced that the government intends to conduct a “token mapping” exercise, which was one of the recommendations made by the Senate last year on how to grow the cryptocurrency market in Australia.

The Senate’s recommendations were warmly received by the crypto community, which has been waiting to see whether or not the Labor Party government in Australia would embrace it. According to Chalmers, the token mapping exercise is scheduled to be held before the end of 2022 even as the Bank of England analysts see crypto having important roles in the metaverse.

The exercise will help “identify how crypto assets and related services should be regulated” and inform future regulatory decisions. Chalmers hints that the other recommendations by the Senate like the review of the decentralized autonomous organization (DAO) company-style structure, developing appropriate requirements to safeguard the consumer crypto asset custody, as well as creating a licensing framework for crypto asset service providers dealing in non-financial product crypto assets, would be implemented in the near future.

The announcement made by Treasurer Jim Chalmers was signed by Assistant Minister for Competition, Charities and Treasury, Andrew Leigh, along with Assistant Treasurer and Minister for Financial Services, Stephen Jones. The Labor Party government led by the Prime Minister, Anthony Albanese, says it will deploy every resources within it reach to tap into the “largely unregulated” crypto sector:

“As it stands, the crypto sector is largely unregulated, and we need to do some work to get the balance right so we can embrace new and innovative technologies,” Chalmers asserted. Chalmers claims that since 2018 most Australian tax payers have interacted with cryptocurrencies one way or the other, noting that “regulation is struggling to keep pace and adapt with the crypto asset sector.”

The statement issued by Chalmers also claimed that the previous administration took steps to regulate the crypto ecosystem through secondary service providers “without first understanding what was being regulated.” But the Labor Party-led government intends to take a more serious approach by first working out the components of the crypto ecosystem and the risks associated with crypto investments.

Industry watchers believe that the token mapping exercise is an important step that will help to bridge the seeming gap that exists between policymakers and regulators. If the gap is not closed urgently, experts believe that regulatory uncertainty could lead to businesses leaving the country in droves.

A sensible token mapping exercise which helps regulators and policy makers understand in depth the activities they are looking to regulate and how the technology interfaces with those activities should help regulation be fit for purpose and both support innovation and jobs in Australia while protecting consumers,” the CEO of BTC Markets, Caroline Bowler, argued.

Token mapping will provide “greater clarity to crypto investors; aid companies in developing their own blockchain-based innovations; provide guidance to digital currency exchanges; as well as assist regulators in shaping an appropriate regulatory regime,” she said.

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