The Albanese government has announced its intention of improving the regulation of cryptocurrency to enable the Australian economy to enjoy the maximum benefit from digital assets.
The government’s new approach will cover three main components being strengthening enforcement, bolstering consumer protection and putting in place a framework for reform.
With regard to strengthening enforcement activities, the Australian Securities and Investments Commission (ASIC) will be increasing the size of its team dealing with cryptocurrency and will be improving its enforcement measures.
“The regulator will take legal action where it identifies crypto offerings being marketed without the appropriate credit or financial services licence,” Assistant Treasurer and Financial Services Minister Stephen Jones noted.
“ASIC will pay particular attention to ensuring that risks to consumers are appropriately disclosed.”
Consumer protection will be improved through reforms to the licensing and custody of cryptocurrency assets. In particular, the government will be aiming to better control cryptocurrency assets that are currently not captured by the financial services regulatory framework.
“We will establish a set of obligations and operational standards for crypto asset service providers to ensure they adequately safe‑keep assets for customers,” Jones revealed.
“This will ensure consumers are protected from avoidable business failures or from the misuse of their assets by service providers.”
The design of this legislation will involve a consultation period beginning in mid-2023 with regard to the design of a custody and licensing framework.
Finally, Treasury is undertaking a token mapping exercise with a view to establishing a framework for cryptocurrency reform.
“A consultation paper released today [3 February] explores in detail which elements of the crypto ecosystem are sufficiently regulated and which require additional attention,” Jones said.
“This will enable the government and stakeholders to focus on regulatory gaps and ensure that emerging risks are identified and controlled.
“Unsustainable business models used by some companies dealing in crypto assets have left consumers exposed.
“We are acting swiftly and methodically to ensure that consumers are adequately protected and true innovation can flourish.”