There is controversy over crypto regulation in Australia.
Crypto regulation has been receiving increasing interest in different jurisdictions recently. While some countries maintain rigid control over digital assets, some have outright banned their use.
Currently, crypto regulation in Australia is undergoing heated discussions. Some of the country’s top government officials want to classify cryptocurrencies as financial products, while some cryptocurrency executives refute it.
The Minister Considers that the Regulation of Cryptocurrencies as Financial Products is an Argument, Why?
An Australian media, The Sydney Morning Herald (SMH), reported on the country’s stance on crypto regulation. According to SMH, Stephen Jones, Australia’s deputy treasurer and minister for financial services, spoke on the matter on January 22, 2023.
In his speech, Minister Jones mentioned that the government plans to implement some laws regarding crypto regulations this year. Furthermore, he revealed that the government intends to embark on a token mapping exercise that highlights all crypto assets to regulate.
Furthermore, Minister Jones mentioned the collapse of the FTX crypto exchange and its consequences, highlighting the need for crypto regulation. Therefore, the government has set its sights on some unregulated crypto assets, especially those that act as securities or financial products.
Jones noted that the goal is not to establish a different regulatory regime for crypto assets, as they are classified as financial products. Therefore, for him, if crypto assets operate as financial products, they should be considered as such.
The minister argued that various tokens have served as speculative assets and investments. The SMH report shows that other parties support the regulation of crypto assets as securities in the country. These include the Australian Securities and Investments Commission (ASIC) and the Commonwealth Bank, one of Australia’s leading banks.
Crypto Executives Refute Broad-Focused Regulation for Digital Assets
Australian crypto executives and some market participants have opposed the regulation of crypto assets as securities.
Blockchain Australia, a crypto industry group, refuted the approach while speaking to the Federal Treasury last year. The group noted that treating crypto assets as financial products will have a negative impact on investments and innovations in the sector. Furthermore, the move will cause a massive loss of jobs related to the cryptocurrency industry.
Fred Schebesta, an Australian crypto entrepreneur, reacted to the government’s plan for token mapping in September 2022. Schebesta, co-founder of Finder, an Australian comparison website, noted that this process could have positive results. However, he reported that accelerating the process could harm the country’s economy.
According to Schebesta, the Australian crypto industry is still underdeveloped and will need more support to grow. Therefore, there is the need to learn from other major marketsm and copy their regulatory approaches.
Furthermore, crypto market participants oppose the use of a broad approach for crypto assets. According to Michael Bacina, a digital asset lawyer and partner at Piper Alderman, such a broad classification will send many cryptocurrency-related companies abroad, and thus create more risks at home.
By Audy Castaneda