Australian ‘token mapping’ consultation paper to release in early 2023: Treasurer

December 14, 2022 Coin Telegraph

The consultation paper will give an insight into how certain crypto assets should be regulated alongside frameworks for company licensing, asset custody and consumer protections under token mapping.

Australian Treasurer Jim Chalmers has revealed that the government will release a consultation paper in early 2023 as part of its token mapping initiative.

The crypto sector has received greater attention from Australian regulatory and enforcement agencies since the FTX implosion, with the government emphasizing the importance of providing greater consumer protection laws as soon as possible.

In a Dec. 14 statement, Treasurer Chalmers noted that the Anthony Albanese-led government is “taking action to improve the regulation of crypto service providers and ensure additional safeguards for Australians.”

As part of that process, Chalmers revealed the consultation paper will cover how certain crypto assets should be regulated alongside frameworks for company licensing, asset custody and consumer protections under its previously announced token mapping exercise.

“The next steps in the Government’s ongoing ‘token mapping’ work 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.”

“Following the release of token mapping, the Government will consult on a custody and licensing framework next year before introducing legislation,” he added.

The latest comments from Chalmers adds to a promise from the Treasury in mid-November that it will develop and enact a robust regulatory framework for crypto in 2023.

The focus on crypto is also part of a push to “modernize Australia’s financial system” with the government set reform regulations on financial market infrastructure — particularly in relation to the Australian Securities Exchange's (ASX's) clearing system, payments systems and the Buy Now Pay Later sector.

Australia’s government has been largely pro-crypto but has reiterated the importance of allowing for innovation while keeping the public safe.

On Dec. 8, the Reserve Bank of Australia (RBA) published a stablecoin-focused report which suggested the regulators are “undertaking significant work” to figure out how to safely integrate them into the ecosystem.

“Stablecoins have the potential to enhance the efficiency and functionality of a range of payment and other financial services,” the report read.

Aussie FPA supports ‘crypto rule book’ and regulation of exchanges

July 15, 2022 Coin Telegraph

Australian crypto regulation

Swyftx co-CEO Ryan Parsons echoed the calls from the FPA, noting that “Our preference is for crypto platforms to operate within the existing financial services licensing framework.”

The Financial Planning Association of Australia (FPA) has shown its support for the “crypto rule book” idea and called for regulating exchanges instead of crypto assets.

In May, the Australian Law Reform Council (ALRC) proposed to tackle crypto regulation through a rule book-style framework which sets out a series of gradually updated compliance principles for local crypto firms to adhere to.

The comments came via a submission to the Treasury by FPA’s head of policy, strategy and innovation, Ben Marshan, who also argued that the regulation of crypto exchanges should fall under the current financial services regime and not under a new separate legal framework.

“Firstly, it would create an alternate, duplicate regulatory regime to regulate what at the core is the purchase and holding of a financial asset to either retail or wholesale investors.”

“Secondly, it would require existing financial service licensees to apply for and hold a separate type of license, adding to cost and regulatory duplication,” he added.

Mashan also emphasized a need to roll out greater consumer protections for local Australian crypto users and highlighted that regulating secondary providers (crypto exchanges, brokers etc.) is the best way to do this.

“The regulation of a financial product or service should not depend on the technology which underlies the asset,” he said, adding that “it would be virtually impossible to regulate the product because it’s so decentralized, they’re in all sorts of foreign jurisdictions.”

Focusing regulation on crypto service providers will remove a lot of “complexity” from the equation given the rapidly evolving nature of blockchain tech and crypto, argued Mashan, adding that the ALRC’s crypto rule book idea for firms to follow “makes sense.”

“It makes it a lot easier because instead of having to work your way through thousands of pages of the Corporations Act people can go to a specific section, and it’s much more efficient.”

Speaking with Cointelegraph, Ryan Parsons, the co-CEO of local crypto exchange Swyftx, echoed the calls from Mashan and noted that his firm wants to see “sensible measures that support consumer protections” enacted soon so that Australia doesn’t risk falling behind the United States and European Union:

“Our preference is for crypto platforms to operate within the existing financial services licensing framework, albeit in a way that accounts for the unique characteristics of digital assets.”

“We think this is the best way to reduce complexity and cost, as well as build confidence in crypto as an asset class among Australian investors,” he added.

Another key idea highlighted in the ALRC’s report was to introduce the Twin Peaks regulatory model, in which regulation is split between one entity that is tasked with overseeing the maintenance of financial system stability while the other takes care of institutional market conduct and consumer protection.

The same model is used in Australia’s financial regulatory system, with the Australian Securities and Investments Commission (ASIC) in charge of good market conduct and consumer protection, while the Australian Prudential Regulation Authority (APRA) is responsible for financial system stability.

Since the Liberal party was emphatically booted out of government in May, the regulatory landscape of crypto in Australia has become uncertain as the Labor party appears to have other fish to fry.

As it stands, Labor is yet to provide any concrete initiatives but has outlined that introducing greater consumer protections in crypto will be a key area of focus.

Senators Bragg and Lummis discuss crypto laws collaboration between US, Australia

April 29, 2022 Coin Telegraph

Australian crypto regulation

“We want to be close to our friends in the United States on these issues as much as we can,” Australian Senator Andrew Bragg told Cointelegraph.

Australian Senator Andrew Bragg hasmet with U.S. Senator Cynthia Lummis to discuss potential collaboration on cryptocurrency regulation between the two countries.

Senator Bragg is a crypto-friendly politician from the ruling Liberal Party (a conservative center right party) that has been one of the driving forces behind a proposed forward-thinking regulatory scheme in Australia.

Last year he fronted the Senate Committee on Australia as a Technology and Financial Center (ATFC) which tabled 12 extensive regulatory proposals relating to taxation, decentralized autonomous organizations (DAOs) and company licensing. Two months later, Treasurer Josh Frydenburg outlined intentions to begin implementing at least six of the proposals by mid-2022.

Since then the proposals have been refined and packaged into the Digital Services Act, however, its implementation is up in the air. With the federal election set to take place next month, it is unclear if the act will be adopted if the opposition Labor party is voted in, given it is yet to provide a concrete stance on the crypto sector.

Bragg spoke with Lummis — who is a known crypto proponent and Bitcoin (BTC) hodler — via a video call this week, and told Cointelegraph that the discussion focused mainly on the “opportunities for regulatory equivalents.”

Thanks for the great visit! https://t.co/3tqrwhAj0v
— Cynthia Lummis (@CynthiaMLummis) April 26, 2022

While he wouldn’t go into specifics, Bragg emphasized the importance of aligning on as many issues as possible with the U.S. given the historical partnership between the two nations:

“I see that as an economic growth area, as a security objective, because we have a unique relationship with the United States, which is cultural, economic, military. So we want to be close to our friends in the United States on these issues as much as we can.”

He also suggested that both governments are looking to set global standards for crypto regulation, noting that “the executive order from President Biden is reasonably similar to what Treasurer Frydenberg released last December.”

“[If] two large, sophisticated financial economies like the United States and Australia come together that could help drive standards in other parts of the world,” he said.

In terms of collaboration, or at least regulatory equivalence, Bragg noted that it “looks like they've been able to move more quickly on getting different sorts of products into the market. So we'll see what lessons we might be able to pick up there.”

One area that may differ is the two nations’ approach to launching a central bank digital currency (CBDC), with Bragg noting that the U.S. seems more receptive to the idea. Australia’s Reserve Bank has stated there’s no compelling need for one due in part to the nation’s instant digital payments network and Bragg stressed that he was “very cautious” about it at this stage.

“I think I'm, you know, probably more aware of the issues and the risks of going there. So we just need to get the Treasury report done on this issue. I'm hoping that can be done, you know, quickly after the election.”

Asked if Labor being voted in would derail Bragg’s efforts at crypto reform over the past two years, the Senator frankly stated that he had no idea.

“I mean, you’ll have to talk to Labor about it. But I mean, they haven't got any policy. So, yeah, I certainly hope not, but I mean, they don't have any policies,” he said.

Bragg also delivered a speech at the Accounting Business Expo in Sydney yesterday, as he outlined his political parties’ intention to provide “good regulation” as opposed to stifling regulation.

“Regulation which creates certainty while inviting the possibility of more innovation, including innovation which we cannot anticipate. Regulation which protects the interests of consumers and investors on a level playing field – while allowing for flexibility, inventiveness, and experimentation.”

“Regulation which provides a safety net when the market fails but holds individuals accountable for the consequences of their actions,” he added.

Crypto Is Driven by Extraordinary Consumer and Investor Demand, Says Australian Regulator

November 24, 2021 Bitcoin.com

New Australian crypto legislation likely in 2022, Senator Bragg tells NFT Fest

October 1, 2021 Coin Telegraph

Australian crypto regulation

Talking about a digital asset plan being cooked up by a Senate inquiry, Senator Andrew Bragg said, “We will want the major parties, including my party, to adopt these policies as part of their election manifestos.”

Liberal Senator Andrew Bragg has told a local industry event that Australia’s digital asset plan to create cryptocurrency-related legislation is “coming” soon and could be enacted in 2022.

He also backed plans to run the sector on renewable energy as part of the government's yet-to- be-established goal of achieving ‘net zero’ carbon emissions.

Speaking at the virtual NFT Fest event supported by Blockchain Australia on Sept. 30, Bragg stated that the select Senate committee investigating the topic will publish its report by the end of October, which will include regulatory recommendations that can be legislated over the next 12 months.

“The review is due to conclude in about three weeks from now and the promise that I made you, I will keep. We will give you a plan, and that plan will be designed to put Australia at the front end of the digital asset society and the world,” he said.

Address to @BlockchainAUS @NFTFestAus - Australia’s digital asset plan is coming. https://t.co/xZVIKWGaZv
— Senator Andrew Bragg (@ajamesbragg) September 30, 2021

The crypto-friendly Senator hosted the Senate inquiry into “Australia as a Technology and Financial Centre,” in 2021, but emphasized yesterday that it is now time to put solid frameworks in place as opposed to prolonging the process with further reviews.

While there is still a lot of work to do, Bragg hopes the plan will be adopted no matter which political party is elected in the next federal election due 2022:

“I think that you deserve more than just a series of recommendations for new inquiries, task forces and further review. So we will be making some hard recommendations. [...] We will want the major parties, including my party, to adopt these policies as part of their election manifestos.”

While Bragg didn’t outline the specifics, he stated that the plan will include recommendations for a “robust policy framework” focused on three objectives: consumer protection, investor promotion and market competition.

“Now, for those of you that say we don't want to have regulation. I would remind you that your industry reps and the vast bulk of the industry is asking for some regulation, so there will be some regulation,” he said.

The Senator also stated that he is “very conscious” about not wanting to stifle innovation in crypto via regulation that suits the “incumbent vested interests” who want to see the sector “destroyed by a regulation that was designed for a whole different purpose.”

Speaking on environmental concerns over crypto’s energy consumption — as well as the government’s ambitions to transition to a “net-zero economy” — Bragg stated that he wants to see the crypto sector operate using solely renewable energy:

“I’ll just put the simple fact that we are trying to get to net zero. We want to get there as soon as we can. I personally think it's highly, and strongly in our economic interests to transition to a net-zero economy. And in the area of digital assets using a lot of electricity, we want that to happen on a renewable basis.”

“So I think it's a unique opportunity for the industry to pull this, pull those two things together,” he added.

Australian crypto regulation

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