Australian Government Delays Crypto Legislation 

Jimmy Aki
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According to internal documents from the Treasury Department, the legalization of cryptocurrencies in Australia may be at least a year away.

The Australian Financial Review claims that documents collected under the freedom of information act indicate that the government plans to hold stakeholder roundtables on custody and cryptocurrency licensing in the third quarter of 2023 and distribute consultation papers in the second quarter.

Government Goes Slow on Regulation

Internal Treasury records indicate that new laws are still more than a year away, despite tens of thousands of Australians losing money in recent cryptocurrency crashes and frauds.

The Australian Financial Review received a cache of documents under the Freedom of Information Act that indicate Treasury discussions for Treasurer Jim Chalmers over how the government should attempt to regulate the uncharted territory of cryptocurrency, non-fungible tokens, and web3.

The Australian Labor government’s token mapping initiative announced three months after taking office and whose submission period ended on March 3, 2022, has been eagerly anticipated by the sector. The consultation is a step in a multi-step reform plan to create a suitable regulatory environment for the cryptocurrency industry.

However, these confidential government papers suggest that Australia’s crypto law may not be implemented until 2024 or later since the government appears to want to take its time and properly study the sector.

According to documents obtained by The Australian Financial Review (AFR) under the Right of Information Act, the government intends to organize stakeholder roundtables on custody and crypto licensing in the third quarter of 2023 and distribute consultation papers in the second.

The documents also stated that the government had created a special crypto policy section under the Treasury division.

In a meeting with the Treasury last November, the crypto policy section reportedly raised the possibility of fit and proper person testing, capital requirements, and obligations to report dishonest business practices and scams. Also, the unit discussed strengthening consumer protection.

A recent survey from Australian crypto exchange Swyftx revealed that approximately one million Australians intend to purchase cryptocurrency for the first time this year, bringing total crypto ownership to over five million.

The AFR reportedly noted that they expect resentment from the corporate community in the crypto industry and consumer advocacy groups due to the extended schedule.

Australia Strengthens Crypto Watchdogs in Scam-Fighting Strategy

The token mapping consultation paper, which aims to establish which components of the cryptocurrency ecosystem ill be regulated and to what extent, was published by the Australian Treasury in February last year.

The multi-stage approach plan was accelerated after the devastating collapse of FTX in November, which affected over 30,000 Australians and 132 Australian-based businesses.

According to a joint statement from Australian Treasurer Jim Chalmers and Assistant Treasurer Stephen Jones, the new regulations are intended to safeguard consumers interacting with cryptocurrencies.

The multi-stage plan would have three elements as guidance. This includes improved consumer protection, improved enforcement, and the creation of a framework for token mapping reform.

One of the key adjustments will be expanding the digital assets team at the Australian Securities & Investments Commission (ASIC) and increasing enforcement measures.

The Australian Competition and Consumer Commission (ACCC) – the nation’s competition watchdog – will also receive new tools from the government to better defend consumers from scams involving cryptocurrencies. In 2022 alone, over $221 million was lost to scams involving cryptocurrency payments.

The ACCC will use the new tool, which will be a real-time data-sharing platform, to recognize and stop cryptocurrency scams.

While a framework is developed to govern the licensing and custody of digital assets, consumer protection will also be strengthened. This will ensure customers are safeguarded from preventable business losses or the squandering of their assets by service providers.

This framework was supposed to kick off by the middle of 2023. However, the project may take some time due to government delays before it becomes law.

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.