Australian Cryptocurrency Exchanges Approach the New Licensing System With Measured Hopefulness
The majority of Australian cryptocurrency exchanges have welcomed the recent Treasury proposal to incorporate crypto exchanges within the existing financial services licensing framework. However, there are concerns among some that this move might confine the crypto industry within a traditional financial services mould.
Australian cryptocurrency exchanges have commended the Australian Treasury’s intentions to subject cryptocurrency exchange platforms to the established financial services licensing measures.
In an advisory document dated October 16, the Treasury outlined a comprehensive set of proposed regulations aimed at bringing cryptocurrency exchanges within the existing financial services regulatory framework while introducing a plethora of new guidelines applicable to all Australian entities involved in digital assets.
During the Australian Financial Review’s Crypto Summit event on October 16, Australian Treasury Assistant Stephen Jones emphasised that the new regulatory framework primarily focuses on three key objectives: fostering an environment conducive to industry growth and innovation, offering regulatory clarity to cryptocurrency service providers, and ensuring the safeguarding of everyday consumers and their assets.
Per CoinTelegraph, Caroline Bowler, CEO of BTC Markets, expressed her satisfaction with achieving a “key milestone” in the regulatory process and viewed the regulations as a positive advancement for the broader cryptocurrency industry in Australia.
“It’s a great next step for the Australian economy. Digital assets are so clearly the future of financial services. It is imperative that the country keeps pace with our international peers with a robust regulatory framework,” remarked Bowler.
Similarly, Adrian Przelozny, CEO of Independent Reserve, lauded the federal government for its recommendations to implement more stringent regulations and policy adjustments, emphasising that these fresh proposals could serve to rebuild confidence within the cryptocurrency sector.
“We firmly believe these changes will drive investment, provide certainty to the sector, and ultimately, increase consumer protection.”
Adam Percy, the general counsel of Swyftx, concurred with many of the Treasury’s recommendations, emphasising the paramount goal of providing secure access to the advantages of blockchain technology for cryptocurrency investors while preserving space for innovation.
Conversely, Jonathon Miller, the managing director of Kraken Australia, voiced apprehension to Cointelegraph, expressing concerns that the new regulations would rigidly confine the cryptocurrency industry within a framework resembling traditional finance (TradFi).
“Australia is now in the unfortunate situation where our regulation has taken a very long time, so we’re taking the approach of shoehorning crypto into existing financial services regulation,” Miller remarked.
However, Miller acknowledged that the consultation paper represented a positive step forward, especially in terms of offering much-needed regulatory clarity to cryptocurrency companies operating within Australia.
“We’re behind our global peers when it comes to implementing a crypto framework, so I appreciate the need to have something in place locally to provide certainty to platforms like ours,” he noted.
Liam Hennessy, a partner at Clyde & Co, an international law firm actively involved in the consultation process, expressed his view that the latest proposal from the Treasury is a logical choice for the Australian cryptocurrency industry.
Hennessy clarified that these new regulations would aid Australia in catching up to regions like the European Union, which have made significant progress in enhancing crypto regulations. Furthermore, he pointed out that the Australian Financial Services licensing framework can be intricate, underscoring the importance for local cryptocurrency exchanges and digital asset service providers to initiate preparations for their applications.