Australia is taking steps to regulate crypto assets in the country three months after the Australian Labor Party's election to power.
Earlier this year, Anthony Albanese's Labor Party defeated Prime Minister Scott Morrison's Liberal-National coalition in the country's federal elections. Following this, the government was asked to review the regulatory framework of the largely unregulated cryptocurrency industry with an emphasis on consumer protection.
Token mapping exercise
Treasurer Jim Chalmers announced a token mapping exercise, which was one of 12 recommendations contained in a Senate investigation report last year.
The token mapping exercise, which is expected to be conducted later this year, will help identify how crypto assets such as Bitcoin (BTC) and related services should be regulated in order to inform future regulatory developments. It will look at the type of crypto asset, the underlying code, and any other technological characteristics that define it.
Treasurer Chalmers, along with Assistant Treasurer and Minister for Financial Services Stephen Jones and Assistant Minister for Competition, Charities and the Treasury, Dr. Andrew Leigh, all expressed how the Albanian-led government wants to produce regulation that fits the "largely unregulated" cryptocurrency industry.
Their joint statement also acknowledged that more than a million Australian taxpayers have interacted with the cryptocurrency ecosystem since 2018 and yet "regulation is struggling to keep pace with the crypto asset industry." Officials attributed this situation to the previous liberal-led government.
Overall, the token mapping exercise is intended to help regulators and policymakers fully understand the activities they intend to regulate, supporting innovation in Australia and protecting consumers.
Regulatory landscape
This move comes at a time when many industry players have called for regulation of the Australian crypto sector to help companies develop their own blockchain-based innovations and provide guidance on cryptocurrency exchanges.
The Labor government hopes the token mapping exercise will be an important step in bridging the significant training gap between regulators and politicians by uncovering the characteristics of all digital asset tokens available in Australia. Other objectives include developing a licensing framework, reviewing innovative organizational structures, examining custody requirements for third party custodians of crypto assets, and providing additional guarantees for consumers.
Additionally, the Australian Securities and Investments Commission (ASIC) found that 44% of citizens own cryptocurrencies, making them the second largest most popular investment after actions. The survey, which collected data from 1.053 retail investors, also showed that a quarter of investors who own cryptocurrencies say it is their only investment.
ASIC President Joe Longo voiced the Commission's concern over the large number of survey respondents who said they had invested in what he called "volatile cryptocurrency products." His views echo the government's repeated rhetoric about the need for greater consumer protection in the cryptocurrency investment landscape.
