‘We’ll unlikely get a second chance at this’: Australian crypto industry reacts to government’s regulation plan
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The Albanese government has made its first real move into the clouded crypto-regulation landscape, announcing a Treasury-led “token-mapping” strategy. Stockhead examines that and rounds up some industry comment…
According to reports from The Australian and News.com.au today, the federal government’s announced token-mapping audit of the local crypto industry will be a “world first”, in consultation with “stakeholders”.
What’s token mapping? Per the reports, it’s “the process of determining the characteristics of all digital tokens available in the country – from Bitcoin to Dogecoin”.
It’s seen as a first step, from the new government at least, to overhaul the regulatory framework of the largely unregulated crypto sector.
Hopefully it’ll actually be something closer to an innovation-friendly tinker than an overhaul… and let’s also hope the Treasury has been taking a good look at the extensive regulatory conversations and recommendations already put forth in consultation with numerous industry participants. A lot of ground was covered on this, particularly late last year.
As The Australian reports, Financial Services Minister Stephen Jones said Australians were experiencing a digital revolution across all sectors of the economy.
“But regulation is struggling to keep pace and adapt with the crypto asset sector,” he said, adding:
“With the increasingly widespread proliferation of crypto assets – to the extent that crypto advertisements can be seen plastered all over big sporting events – we need to make sure customers engaging with crypto are adequately informed and protected.
“As it stands, the crypto sector is largely unregulated, and we need to do some work to get the balance right so we can embrace new and innovative technologies while safeguarding consumers.”
Treasurer Jim Chalmers meanwhile said that the review was about allowing “consumers to participate in the market while also better protecting them”.
“The aim will be to identify notable gaps in the regulatory framework, progress work on a licensing framework, review innovative organisational structures, look at custody obligations for third party custodians of crypto assets and provide additional consumer safeguards,” added the Treasurer.
Former CEO of peak industry body Blockchain Australia, now BlockchainAPAC’s Managing Director, Steve Vallas gave some insights to Stockhead regarding the fresh regulation chatter…
“Token mapping is foundational,” said Vallas. “The characterisation of the products (financial or otherwise) will help inform the requirements imposed upon operators in the space and determine if Australia is to be a jurisdiction that is attractive as an investment destination.”
Vallas did caution, however, that “it’s very unlikely countries will be able to get a second chance at getting this right” but that once greater regulatory certainty is established, “capital will flow”.
He also pointed to the government’s so-far oft-repeated rhetoric of a need for stronger consumer protection when it comes to the crypto-investment landscape.
“The tricky balance here is trying to ensure there is appropriate consumer protection without stifling, or worse, extinguishing, all innovation.”
Vallas underscored that, as ever, consumer-protection-focused regulation is encouraged by industry players as long as consultation continues. He added he believes the government’s token mapping is a “crucial step in providing greater clarity on how and where this industry fits in the broader financial industry landscape”.
Kraken Australia Managing Director Jonathon Miller also emphasised the government’s initial crypto audit will be a “necessary step” for developing “informed and fit-for-purpose regulation”.
“It’s positive to see the Albanese government move forward with recommendations from the Senate Committee report,” said Miller.
Also striking a line of caution, though, the Kraken Australia MD added that he believes the government should “recognise that the existing AML/CTF regulatory environment has provided a sufficient framework for safe onramps and offramps of crypto and encouraged the growth of strong local businesses and attracted international players to set up domestic footprints”.
“An onerous market licensing and/or crypto asset custody/deposit regime could risk driving these businesses offshore,” warned Miller. “As an exchange committed to regulatory compliance operating in nearly 190 jurisdictions, we look forward to being involved in the consultation processes for these projects.”
John Conidi, chairman of Australian multi-platform 3D printing company 333D, also threw his two satoshis into the mix, and sees a very complicated crypto-regulation path ahead for Albo’s government.
“While the crypto sector is seeing some of the biggest innovations in technology and business, it is also extremely complicated to regulate due to the sheer number of players and truly global and decentralised nature of the industry,” noted Conidi.
“As a result, there is only so much the government can do to regulate, educate and protect consumers, and we are still some way off any meaningful regulation in Australia.
“Having said that, it is promising to see the government taking note of the opportunities that the space is already providing for Australian companies, but it remains to be seen how much impact actions like the proposed ‘token mapping’ will have on those already doing business,” he concluded.