Australia has been known for its progressive stance on cryptocurrency regulation. Recently, Senator Andrew Bragg submitted a private senators’ bill titled Digital Assets (Market Regulation) Bill 2023 to the Australian Parliament. The bill proposes regulatory recommendations for stablecoins, licensing of exchanges, and custody requirements to protect consumers and promote investment in the country’s cryptocurrency market.
The proposed regulatory changes aim to provide a regulatory framework for cryptocurrency exchanges, custody services, and stablecoin issuers in Australia. The bill is intended to protect consumers and promote investment while providing guidelines for reporting information by authorized deposit-taking institutions for the issuance and control of a central bank digital currency.
Senator Bragg provided further information for the submission of the private bill, criticizing the current Labor government for not following through on 12 recommendations relating to cryptocurrency regulation introduced by the Senate Select Committee on Australia as a Technology and Financial Centre in October 2021. Bragg highlighted that the Australian consumers had been left exposed to industry-wide events like the collapse of FTX by the inaction of the Australian government to provide regulatory clarity to the sector.
The proposed act also sets out various obligations and requirements for exchanges, custody services, and stablecoin issuers. These range from capital or minimum reserve requirements, segregation of customer funds, reporting on customer holdings, auditing, assurance, and disclosure arrangements.
The bill would require a person or business to hold a license granted by the Australian Securities and Investments Commission or a foreign license to operate a cryptocurrency exchange. This would also apply to cryptocurrency custody services and stablecoin issuers in Australia.
In contrast to the typical introduction of regulatory changes by Australian ministers, members of parliament can introduce private members’ or private senators’ bills, which can take months or years to pass through parliament. As a result, it may take some time before the Digital Assets (Market Regulation) Bill 2023 is passed into law.
Public consultation is currently ongoing in Australia over the classification of cryptocurrencies and various digital asset tokens, services, and platforms. The “token mapping” consultation paper was released in February, outlining basic definitions for the cryptocurrency sector.
The proposed bill by Senator Bragg is a significant step towards regulating the cryptocurrency sector in Australia, ensuring the protection of consumers and promoting investment in the country’s growing digital assets market. If passed, the bill would provide a clear regulatory framework for cryptocurrency exchanges, custody services, and stablecoin issuers to operate in Australia.
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