Australia is taking a significant step towards regulating the rapidly expanding cryptocurrency industry. The Treasury’s plans include introducing a licensing regime for crypto exchanges to protect consumers and bring clarity to the digital asset sector.
Under the proposed framework, exchanges that hold more than AUD 1,500 of any single client’s assets or have total assets exceeding AUD 5 million must obtain an Australian Financial Services license (AFSL) from the Australian Securities and Investments Commission (ASIC). Draft legislation covering licensing and custody rules for crypto asset providers is expected to be released by 2024, with a 12-month transition period for exchanges to align their operations with the new regulations.
The government has initiated a consultative process, seeking input from stakeholders and the public on 32 key regulatory themes. Caroline Bowler, CEO of BTC Markets, responded to the consultation paper and called it a “key milestone.”
The proposed regulatory framework seeks to ensure consumer protection while fostering innovation. The Reserve Bank of Australia and the Treasury will jointly publish a report in 2024, offering insights into CBDC research within the nation and outlining a roadmap for future work.
Australia’s commitment to regulating the crypto industry in a manner that balances protection and innovation is clear. With the consultation process underway, the nation is poised to join its international peers in establishing a framework that addresses the unique challenges of the digital asset space while safeguarding the interests of consumers.
