Australian Senate Committee’s Rejection of Pivotal Crypto Legislation Triggers Discussion on Digital Asset Oversight

05 Sep 2023

Mitchell Nixon


The Senate Committee on Economic Legislation has issued a recommendation against the approval of Senator Andrew Bragg’s Digital Assets (Market Regulation) Bill 2023. The committee officially communicated this decision on September 4, advising the government to continue its research on the subject rather than enact the proposed legislation.

While the majority opinion within the committee opposed the bill, Senators Andrew Bragg and Dean Smith presented a dissenting report in favour of passing it with minor amendments. Their suggested modifications include excluding non fungible tokens (NFTs) from the definition of regulated digital assets.

In their recommendations, those opposing the bill have proposed excluding specific asset-based tokens from the stablecoin classification, potentially encompassing tokens like the Gold and Silver Standard and the BetaCarbon Token. They have also suggested extending the transition period from three to nine months to facilitate a more gradual implementation of the proposed changes.

The dissenting senators have additionally called for a review of the tax treatment of digital assets and transactions, with the aim of introducing new legislation in early 2024.

Senator Bragg initially introduced the bill in March 2023 with the goal of safeguarding consumers and fostering investment. The draft legislation outlined regulatory guidelines for stablecoins, exchange licensing, and custody requirements. 

The dissenting report argued that the government’s current approach to regulating digital assets is detrimental to Australian consumers and investment, describing the bill as the  “first serious step towards implementing a comprehensive digital asset regulatory framework.”

“The government has junked the ambitious crypto agenda of the former liberal government, and Australians will pay the price.”

The Senate committee’s decision comes at a time when concerns are growing regarding how the banking industry is treating cryptocurrency companies. The Australian Department of the Treasury had previously acknowledged that the trend of banks severing ties with crypto firms could force the industry underground, potentially leading to unintended consequences.

The central bank initiated a pilot test to investigate potential applications for Australia’s native Central Bank Digital Currency (CBDC) and recently concluded that “any decision on a CBDC in Australia is likely to be some years away.”