Australian Government Unveils Crypto Regulation Plan Before Upcoming Election

Jimmy Aki
Last Updated:

Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.

On March 21, Australia’s government, led by the ruling center-left Labor Party, introduced a crypto regulation plan for exchanges under existing financial services laws. The proposal also aims to tackle debanking, making it harder for some businesses to access banking services in the country.

New Regulations Set for Custody Services and Brokerage Firms

According to a statement by Australia’s Treasury Department, crypto exchanges, custody services, and brokerage firms involved in trading or storing digital assets will now be subject to new financial regulations.

These entities must comply with the same standards as traditional financial services, including securing an Australian Financial Services Licence, maintaining minimum capital requirements, and implementing strict consumer asset protections.

This initiative is part of the government’s broader effort to introduce comprehensive crypto regulation.

The regulatory framework focuses on four key areas. These are the Digital Asset Platforms (DAPs), payment stablecoins, Australia’s Enhanced Regulatory Sandbox, and a range of initiatives to safely integrate digital assets into financial markets and the broader economy.

The ruling center-left Labor Party, led by Prime Minister Anthony Albanese, is spearheading this effort as it prepares to release a draft of the legislation for public consultation.

However, with the Australian federal election set to take place on or before May 17, the country could see a shift in leadership. The opposition Coalition, led by Peter Dutton, has made it clear that it also prioritizes crypto regulation, promising a more defined approach if elected.

Current polling suggests a tight race, with the Labor Party at 31% and the Coalition at 37%, making crypto policy a potential deciding factor in the election outcome.

Labor Party Sees Digital Assets as a Solution to Debanking

The Australian government, which is the ruling Labor Party, acknowledges that debanking is a global issue that impacts the digital asset sector. Without access to banking services, businesses and individuals face severe financial limitations, stifling competition and innovation in the financial industry.

The government’s proposed crypto regulation aims to strengthen risk management and improve financial access.

As part of this approach, the Labor Party has also confirmed that no new crypto-specific taxation laws will be introduced. Instead, the government will rely on existing tax regulations, following recommendations from the Board of Taxation.

To provide further clarity, the Tax Office will establish a crypto working group. This group will collaborate with industry experts and tax professionals to develop detailed crypto tax guidance for the public.

With these measures, the Labor Party seeks to address key industry concerns while positioning itself as the leader in shaping Australia’s crypto regulation.

Crypto’s Influence in Australia’s Election May Mirror Its Impact in the U.S.

The upcoming election in Australia draws parallels to the U.S. presidential race between Donald Trump and Kamala Harris, where crypto regulation played a key role in shaping voter support.

During her campaign, Harris acknowledged the need for clear regulations, stating that she would ensure crypto investors, particularly Black men and others in the market, benefit from a protective regulatory framework.

However, Trump was more vocal about the global advantages of crypto, promising a clearer regulatory landscape that would position the U.S. as a leader in the industry. His strong stance earned him high backing from pro-crypto voters, ultimately contributing to his election victory.

Upon taking office on January 20, he swiftly followed through on his promises, reinforcing the role of digital assets in the U.S. economy.

He signed an executive order to explore a national crypto reserve and later announced the inclusion of major cryptocurrencies, including Bitcoin, Ethereum, Solana, XRP, and Cardano, into the United States’ strategic crypto reserve.

The Trump administration’s clear policies on digital assets have reinforced America’s position as a key player in the global crypto market.

Similarly, the Labor Party in Australia hopes its crypto regulation efforts will resonate with voters and potentially shift the tides in its favor.

Whether this strategy will be enough to secure a second term remains uncertain, but crypto regulation will undoubtedly play a major role in shaping Australia’s political and financial sector.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.