Possible Timeline for Australia’s Crypto Legislation Revealed

For some people, cryptocurrencies are complex, high-risk assets, making them difficult to understand despite their potential. This limitation has occurred challenges for several governments while seeking regulatory clarity for crypto. The same issue has weighed on Australian authorities planning to release clear legislation for cryptocurrencies.

According to a new report, the Australian Department of Finance revealed a new timeline for crypto legislation in the country. The internal document noted that the liberalization of Australia’s crypto legislation could extend beyond 2024, as the government wants to study the industry thoroughly before making decisions.

Decisions regarding Australian crypto legislation may take time

The Australian Financial review obtained some documents under the Freedom Act showed that the government aims to roll out consultation papers in the second quarter of 2023. The authorities will also hold roundtable meetings with stakeholders in the third quarter of 2023 to discuss issues regarding the licensing and custody of digital assets.

The digital asset industry has anticipated the Australian government’s next step in the token mapping exercise announced in August 2022.

Australian Department of Finance announced 2 February that it released the consultation document on token mapping. The department also said it is open to consultations to help the government understand the digital asset sector and develop an appropriate digital asset regulatory framework.

The hearing process was concluded on 3 March for the public, but the final submissions to the Cabinet will not take place until later in the year. This delay in the final submission to the cabinet could delay the decisions on digital legislation until 2024 or beyond.

According to reports, a briefing from the Ministry of Finance acknowledged that they expect the mapping exercise to be challenging. Australian Treasurer Jim Chalmers said he expected complaints from digital businesses and consumer groups over the long timeline for implementing the licensing regime.

He noted that consumer groups seeking immediate protection and businesses seeking to gain regulatory legitimacy would find the delay frustrating.

Also, the token mapping may take a long time as the Treasury assesses the current market conditions, reducing the demand for cryptocurrencies. The Australian government revealed that it was creating a crypto policy unit within the Treasury Department.

However, Treasury assessed the risks associated with digital assets, which the FTX collapse magnified, and is calling for a thorough approach to regulation as demand for digital assets has fallen.

In a meeting with the Treasury in November 2022, the Digital Assets Policy Unit highlighted possible requirements for digital licences. These requirements include capacity/capability tests, capital or financial restrictions and obligations to report bad players and fraud in the industry. The unit also discussed tightening the consumer protection policy.

More Australians can legally own a crypto

In September 2022, an Australian crypto exchange called Swyftx was implemented A survey. The survey found that around 1 million Australians are looking to buy a cryptocurrency for the first time in the next 12 months, while 4.2 million already own crypto assets. This observation brought the total ownership of digital currency in the country to over five million.

There’s no telling exactly what will happen when the Australian government finally releases its digital assets legislation. But it would give regulators the necessary framework and clarity to oversee the digital industry. There is also a good chance that it can control the digital asset introduction in Australia.

Featured image from Pixabay and chart from Tradingview