In another large-scale countrywide move to support cryptocurrency, Australia is now moving towards developing a fresh framework for crypto firm regulations starting in 2023. This is expected to further modernize the country’s financial system for crypto even further, an endeavor that has already been almost a decade in the making.
Modernizing Australia’s Financial System
This comes from an official joint statement from the State Treasurer himself, Jim Chalmers, and Assistant Treasurer Stephen Jones. In brief, the government generally aims to strengthen the country’s financial market infrastructure and regulatory frameworks. But the peculiar fourth objective specifically targets the crypto service providers to “establish a framework for the licensing and regulation”.
This starts with the ongoing ‘token mapping’ strategy of the government, which is in the form of a consultation paper that would assess which digital assets should be regulated, and which should be blocked. At the discretion of the financial services laws build upon such data, the proper custody and licensing would then be created to protect consumers.
After the token mapping phase, which is expected to be completed during mid-2023, the Albanese Government would then propose licensing framework before passing on the idea of legislating all approved regulations.
Australia’s Cryptocurrency Wildfire
Australia’s openness to cryptocurrency has been a fascinating subject of study for many researchers for the past few years. According to PureProfile’s research last June 2022, more than half of the surveyed consumers and businesses express their desire to transact mainly in cryptocurrency. Bitcoin and Ethereum are the typical tenders, but there are also a lot of Australian dollar-backed stablecoins that have been circulating for the last few years.
In fact, Peregrine Corporation, one of the largest privately owned companies in Australia, already greenlit the plan to accept cryptocurrency in all of its On the Run (OTR) convenience stores all around the country. Crypto.com’s Pay Merchant is set as the transaction platform, while Datamesh will provide point-of-sale terminal units. This was just the first step, by the way. Other financial entities owned by Peregrine Corporation, such as Krispy Kreme, is also set to accept cryptocurrency in select areas such as South Australia and Northern Territory.
Also, keep in mind that there are at least a million Australians that already have cryptocurrency-based assets. So finding a way to regulate crypto service providers is just another outlet to emphasize the importance of digitized, decentralized currencies in the modern world.
Government Rising up to the Challange
On the administrative side of things, the Albanese Government responded to this booming crypto industry growth by setting up a dedicated crypto unit. Acting as a sub-unit of the Criminal Assets Confiscation Taskforce, their primary mission is to trace, freeze, and seize cryptocurrency and other related digital assets that are linked to criminal activity.
As for the aforementioned ‘token mapping’, the strategy was already in the works even as early as the first months of 2022. First starting as a way to evaluate otherwise nuanced trends in Australian crypto markets, it has since then continued to evolve to become the primary assessment platform to know how to deal with crypto in an official state capacity in the near future.
The move to study cryptocurrency at its core and understand its workings from both business and consumer perspectives is quite different from other expected approaches. Notoriously, the same Albanese Government attempted to create a sort of crypto asset regulation scheme prior to the global pandemic. It ultimately failed, however, due to not really understanding what the technology and system were all about.
Protecting Against Misunderstood Investment
Another important element of this development toward robust crypto-licensing procedures is the Australian Securities and Investments Commission (ASIC). Last August 2022, the head of the corporate regulator announced the organization’s concerns over rampant crypto investing. They assessed that this is very premature and that “consumers and investors are not fully understanding the risks, and not even fully understanding what they’re investing [in the first place]”.
So while cryptocurrency’s acceptance is on rise, the pressure to stabilize the institutions as per the government’s responsibility starts to tighter even further. Ultimately, Australia’s fast track toward cryptocurrency research may have actually been an inevitable requirement all along, to prevent the next global financial disaster.