Australian Government Reveals A New Crypto Framework Before Federal Election
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Australian government recently decided to introduce a new regulatory framework for digital assets that will regulate crypto exchanges under the current financial services law. The government, led by the center-left Labor Party, introduced its proposal only weeks before the next federal election.
While the election date has yet to be confirmed, it is expected to take place on, or slightly before May 17. The current polling suggests that it is a tight race between the current Prime Minister Anthony Albanese’s Labor Party, and the Coalition, whose leader is Peter Dutton.
How Will The New Rules Impact The Crypto Industry?
According to the new rules, which were announced by the Treasury Department last week, on March 21, all custody services, crypto exchanges, and even some brokerage firms that store or trade digital assets will be affected. They will face similar compliance requirements to traditional financial services, such as obtaining the Australian Financial Services License, introducing adequate safeguards for keeping customer assets safe and meeting minimum capital requirements.
However, it is important to note that the new framework will not cover the entire digital asset ecosystem. Specifically, smaller platforms and those below a certain threshold will be exempt, and so will the companies involved in non-financial digital assets, or blockchain software.
In addition, any stablecoins used to make payments will be classified as a type of stored-value facility. Meanwhile, wrapped tokens and other stablecoin types will be exempt.
The government also promised to address the debanking issue through a collaboration with four largest banks in Australia. On top of that, it is planning to review Australian CBDC, and introduce an Enhanced Regulatory Sandbox later this year, which will grant a safe space for businesses to test new financial products without needing the license to do it.
For now, the plan is to release the draft for public review and consultation, but if the federal election results in a change in government, the outcome could be affected. On the other hand, the Coalition, which is running against the Labor Party, also promised to prioritize crypto regulation if it wins the election.
