Australia has released the first step of a multi-stage plan to regulate the cryptocurrency industry within Australia. According to the announcement, Assistant Treasurer Stephan Jones has shared the government’s intention to “Ensure that consumers are adequately protected and true innovation can flourish,” through the new plan.
The announcement shows that the multi‑stage approach has three primary elements:
- Strengthening enforcement
- Bolstering consumer protection
- Establishing a framework for reform.
In the first step, the Australian regulators are focusing on crypto asset providers to make sure they meet their commitments to Australian consumers. The ASIC (Australian Securities & Investments Commission) is increasing the size of its crypto team. ASIC will pay particular attention to ensuring that risks to consumers are appropriately unfolded.
The ACCC (Australian Competition and Consumer Commission) is also putting efforts to prevent scams, including those involving crypto assets. The Government’s National Anti‑Scams Centre, located within the ACCC, will facilitate sharing of data in real‑time and the coordinated prevention and disruption of scams.
Further, in the second step, the government will establish a set of responsibilities and operational standards for crypto asset service providers to ensure they sufficiently safe‑keep assets for customers. This will ensure consumers are protected from avoidable business failures and the misuse of their assets by service providers. Australian Government will reform the licensing and custody of crypto assets, particularly for the subset of crypto assets that currently fall outside the financial services regulatory framework.
Lastly in the third step, immediate action is being taken now to protect consumers, additional work needs to be done to understand the risks and opportunities crypto has for the future. Now the Australian Government and stakeholders can focus on regulatory gaps and ensure that emerging risks are identified and controlled.
While concluding the article we can say that Australia is acting to ensure that through the regulation of crypto assets, they can protect consumers and position their economy to take advantage of new digital products and services. Also, the consultation on the design of a custody and licensing framework will begin in mid‑2023 to allow for sufficient consultation before the introduction of legislation.
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