Australia is to regulate digital assets. The center-left Labor government has tabled a proposed framework. Existing financial services legislation will cover crypto exchanges. Authorities are aiming to protect consumers, encourage innovation, and safeguard market integrity.
The government is collaborating with regulators, industry, and the community. It is seeking to make Australia a digital asset leader. Digital assets create business opportunities for investment and payment systems. Officials believe that compatibility with global standards will make Australia competitive.
Crypto regulations: new rules for digital platforms
New regulations will apply to digital asset platforms. Digital asset platforms store digital assets for consumers. The government will supervise stored-value facilities. Authorities will examine Australia’s regulatory sandbox. Authorities will also look into how to safely realize digital asset potential.
Payment providers will be subject to a restructured regime of licensing. Contemporary payment methods will be covered by the reformed regulations. Stablecoins will be subject to similar conditions to those of traditional payment systems. The government will utilize the existing financial services license framework. Firms will satisfy financial service requirements and specific digital asset provisions.
The reforms apply to trading platforms, custody providers, and some brokerage services. Domestic and foreign firms offering digital asset services are subject to them. Tokenized stored-value instrument issuers will also be regulated. Exceptions apply to issuers of non-financial digital tokens, issuers of digital asset software, and issuers that create blockchain infrastructure.
Covered businesses are subject to financial service provider regulation. They will offer fair service, avoid conflicts of interest, and meet capital requirements. Additional requirements are to safeguard customer funds and maintain redemption requirements for tokenized stored value.
Crypto compliance: ensuring security and fairness
Companies will make public disclosures of reserve compositions and digital asset risks. Stakeholder consultation and legislative time horizons will inform the transition. The government is not making it necessary to obtain a financial markets license to deal in stablecoins and wrapped tokens. Selling such tokens will not amount to operating a financial market. Temporary reprieve to facilitate transition is on consideration by the authorities.
De-banking is on the rise in the cryptocurrency market. Banks refuse to offer services to cryptocurrency businesses. The government is trying to improve transparency, fairness, and risk management. Authorities are working with major banks to address these issues.
The future plans involve a tax reporting framework for cryptocurrency, enhanced regulation sandboxes, and a central bank digital currency study. Tokenization, decentralized finance, and digital finance pilots are also on consideration by regulators. The government will balance innovation and consumer protection to establish Australia as a secure and competitive digital asset market. Public consultation on draft legislation will open in 2025.
