Australia’s Cryptocurrency Legislation May Come In 2024 And Beyond: Report
Mitchell Nixon
According to internal documents obtained from the Australian Treasury Department, it could take at least a year before crypto legislation is put in place in the country.
The government appears to be in no rush to finalise crypto regulations, as the documents suggest that the process could extend beyond 2024. The aim is to gain a comprehensive understanding of the industry, with consultation papers expected to be released in Q2 2023, and stakeholder roundtables on crypto licensing and custody scheduled for Q3.
The Australian Financial Review obtained these documents through freedom of information laws. The industry has been eagerly awaiting the results of the token mapping exercise conducted by the Australian Labor government, which was announced three months after it assumed power last year. Submissions for the exercise ended on March 3.
Consultation open! Today we released the token mapping consultation paper. This consultation is part of a multi step reform agenda to develop an appropriate regulatory setting for the #crypto sector. Read paper & submit views @ https://t.co/4W2msjhP9B @ASIC_Connect @AUSTRAC pic.twitter.com/OGHuZEGvDp
— Australian Treasury (@Treasury_AU) February 2, 2023
The documents indicate that final submissions to the cabinet may not happen until late in the year, prolonging any potential decisions on crypto legislation beyond 2024.
The Treasury Department’s briefing has also acknowledged the likelihood of frustration among crypto businesses and consumer groups due to the lengthy timeline.
“Treasury expects some stakeholders to be disappointed with the perceived delay in implementing a licensing regime,” as per a brief obtained by the Australian Financial Review, which was attributed to Australian Treasurer Jim Chalmers.
“For example, consumer groups seeking immediate protections and businesses seeking regulatory legitimacy.”
Nonetheless, the Treasury Department holds the belief that the demand for cryptocurrencies has substantially weakened after the collapse of FTX, which may provide them with additional time to formulate regulatory frameworks.
“Treasury considers these concerns are somewhat mitigated by the current market conditions resulting in less consumer demand for crypto assets; and the need to complete the token mapping exercise to provide clarity on how any new licensing framework would operate in practice.”
The government has disclosed the establishment of a specialised “crypto policy unit” within the Treasury department in the documents.
During a meeting with the Treasury department in November, the crypto policy unit purportedly highlighted possible prerequisites for crypto licences, such as conducting “fit and proper person” tests, meeting capital requirements, and fulfilling obligations to report fraudulent activities and scams in the industry. The unit also discussed enhancing consumer safeguards.
According to a survey conducted by Australian crypto exchange Swyftx in September of last year, around one million Australians intended to buy cryptocurrency for the first time in the following year, thereby increasing the total number of crypto holders in the country to over five million.
