The goal of this regulatory framework is to promote innovation in the digital asset industry while also protecting consumers.
Plans to regulate the digital asset industry, with a special eye on cryptocurrency exchanges, are moving forward by the Australian federal government.
The “Regulating digital asset platforms” consultation document was launched on October 16, suggesting that bitcoin exchanges may soon be required to get a financial services license granted by the local financial authority.
The focus of this approach is not on regulating specific cryptocurrencies or tokens, but rather on regulating the businesses that deal with them.
Most notably, it plans to regulate cryptocurrency exchanges via preexisting rules governing the financial sector.
According to the proposed regulations, the Australian Securities and Investments Commission (ASIC) would need a license from any cryptocurrency exchange that holds more than $3.2 million ($5 million AUD) or more than $946 ($1,500 AUD) per person.
Australian cryptocurrency exchanges have had a range of reactions to this idea. Adam Percy, general counsel of Swyftx, praised the plan as “thoughtful,” noting the need of supporting innovation while also protecting bitcoin consumers.
Director of Kraken Australia Jonathon Miller was less enthusiastic, calling the consultation paper an effort to shoehorn crypto into current financial services rules and suggesting that Australia is falling behind its international rivals in the implementation of a full crypto system.
Liam Hennessy, partner at the international law firm Clyde & Co, pointed out that the Treasury’s consultation document provides nonbinding advice.
He said that the government should focus on solving the more important problems affecting the Australian crypto business, such as the lack of suitable banking options for legitimate cryptocurrency exchanges.
The Treasury hopes to hear opinions on the proposed rules and issues addressed in the consultation document.
Stakeholders are encouraged to weigh in before the December 1, 2023 submission date. Australia’s government is trying to protect consumers while also encouraging innovation in the cryptocurrency business as the industry struggles to adapt to new laws.
Also Read: BlackRock’s CEO Explains Recent Crypto Rally as a “Flight to Quality,” Not “Rumors”
