Australia’s cryptocurrency sector has shown support for the recently proposed draft laws concerning digital assets, although industry leaders stress the importance of clearer guidelines.
“The draft legislation, as it stands, leaves some critical questions unanswered,” said Caroline Bowler, former CEO of BTC Markets.
Translation: “The draft legislation, as it stands, leaves some critical questions unanswered.”
Following a consultation period that began in late September, the Treasury concluded its review of the proposed regulations, which aim to extend existing financial laws to cryptocurrency exchanges.
The draft law would introduce two new types of financial products: a “digital asset platform” and a “tokenized custody platform,” both necessitating an Australian Financial Services License and registration with the Australian Securities and Investments Commission (ASIC).
Swyftx Highlights Gaps in Draft Laws
In their feedback to the Treasury, crypto exchange Swyftx indicated that the draft law requires “simplifying and clarifying,” particularly regarding the government’s authority and the operational framework for exchanges.
Mandy Jiang from CloudTech Group remarked that while the draft is a “significant step forward,” it delegates many critical details to ASIC.
“Consequently, whether this legislation achieves its stated objectives of fostering innovation and supporting sectoral growth and competition will largely depend on the timeliness and quality of ASIC’s forthcoming guidance,” she warned.
Concerns Around Industry Competition
Swyftx also called attention to the lack of clarity regarding how local crypto firms can engage with international exchanges for liquidity sourcing—a vital component for maintaining competitiveness.
Jason Titman, CEO of Swyftx, emphasized the need for regulation that ensures robust consumer protection while enabling a level playing field for local businesses.
Caroline Bowler raised concerns about the draft’s failure to clarify how to determine what constitutes a financial product under these new rules, expressing that more logical consistency is needed.
“Regulation should be proportionate and fit for purpose. Without that, we risk building a regime that is burdensome for businesses but does not necessarily enhance consumer protection.”
Translation: “Regulation should be proportionate and fit for purpose. Without that, we risk building a regime that is burdensome for businesses but does not necessarily enhance consumer protection.”
Anticipated Changes in Legislation Timeline
Crypto.com’s general manager, Vakul Talwar, urged the government to expedite the legislative process, with expectations that an amendment could be introduced as soon as March 2024.
Edward Carroll from MHC Digital Group predicted that actual legislation may not transpire until late 2026 due to the necessary adjustments and feedback integration.
As the industry awaits concrete legislative measures, eyes remain on how effectively the feedback from this consultation will shape future regulations.
