- Australian regulators are looking to tighten cryptocurrency regulations.
- A consultation paper regarding the digital assets regulations is coming in 2023.
- Regulators will consult on defining the licensing framework for crypto businesses.
Today, the Australian government announced that it is taking adequate measures to tighten regulation for crypto service providers. As such, Australian regulators plan to publish a consultation paper in early 2023 to determine which digital assets they intend to regulate.
Since the FTX collapse, Australian regulatory and enforcement authorities have paid more attention to the cryptocurrency industry, with the government stressing the urgency of enacting stricter consumer protection regulations.
The government is “taking action to improve the regulation of crypto service providers and ensure additional safeguards for Australians,” Treasurer Jim Chalmers noted in the statement.
Chalmers has stated that the consultation paper on tokenization would address concerns regarding regulation for various crypto assets and frameworks for licensing businesses, holding assets, and protecting consumers.
Following the release of token mapping, the Government will consult on a custody and licensing framework next year before introducing legislation.
The Australian government has set out to “modernize Australia’s financial system” by reforming rules on financial market infrastructure, including the clearing system of the Australian Securities Exchange (ASX), payment systems, and the Buy Now Pay Later sector, with crypto being a key element in this effort.
The fall of FTX’s crypto empire highlighted major loopholes in existing systems that must be fixed. In light of recent events, Australia is working to find a middle ground between encouraging innovation and stifling it with overly restrictive crypto regulations.
In addition to ensuring the safety of customers, businesses, and the system as a whole, Chalmers emphasized that Australia’s plan is about “opening up space for further innovation.”
Australian regulators have been monitoring the cryptocurrency market closely. As reported by CoinEdition, last week, the Reserve Bank of Australia (RBA) issued a paper addressing stablecoins. It said that authorities are “undertaking significant work” to determine how to integrate them into the ecosystem securely.
The paper concluded that stablecoins have the ability to “enhance the efficiency and functionality” of various financial services.