Hey there, tech enthusiasts! Have you heard the latest news about cryptocurrency? The government has finally started its much-awaited inquiry into the regulation of digital assets. Treasury is asking for input on token mapping as they aim to create a shared understanding of crypto assets within the Australian financial services regulatory context.
This has been a long time coming. Last August, the government promised to get the balance right so that we can embrace innovative technologies while still safeguarding consumers. Now, Treasury is putting that promise into action by conducting a token mapping exercise. The goal is to ensure consistency, facilitate existing policy goals, and allow responsible actors to innovate with appropriate regulatory oversight.
Australian retail crypto traders grow
Can you believe it? Over a million Australians are expected to include crypto assets on their tax returns in the current financial year. The fact that crypto networks are widely used across all industries in Australia is a testament to the potential of digital assets. While they’re still often associated with speculative trading and pose significant risks, they also have the potential to create jobs and drive innovation.
The consultation paper released by Treasury acknowledges that the crypto ecosystem is not a homogenous industry sector. Some services act as general financial functions, while others are clearly not. However, to ensure consumer protection and financial stability into the future, some regulatory reforms (besides licensing and custody reforms) may be needed.
Crypto ecosystem to face potential regulation
The paper is calling for submissions on the role of government in the regulation of the crypto ecosystem, safeguarding against scams, and how assets should be classified. Some aspects of the crypto ecosystem are still unknown to each other, but they may involve the creation of financial or non-financial crypto assets that are fundamentally different from their intermediated counterparts. Without reforms and new regulatory approaches, some cryptocurrency products may be incompatible with the existing financial services regulatory framework.
Top Australian Brokers
After the token mapping exercise, the government plans to release another paper proposing a licensing and custody framework for cryptocurrency asset service providers in mid-2023. This will provide enough time for discussion before the introduction of legislation. I think it’s exciting to see the government taking cryptocurrency regulation seriously. Let’s see where this takes us!