Australian crypto executives have urged caution over lumping all digital assets in the same boat as financial products, after recent comments from Australia’s assistant treasurer in the ma
Speaking to the Sydney Morning Herald on January 22, Assistant Treasurer and Minister for Financial Services Stephen Jones commented on the state of crypto regulation in the country.
He confirmed that the government is on track with this year’s “token mapping” exercise to determine which crypto assets should be regulated, with a consultation process “soon to begin” with the industry, according to crypto exchange executives.
However, Jones said “not that attracted” to set a completely new set of regulations for something that believes in essence, it is a financial product.
“I don’t want to pre-judge the outcome of the consultation process that will take place. But I start from the position that it looks like a duck, walks like a duck, and sounds like a duck should be treated as one,” said Jones.
“Other coins or other tokens are used as a store of value for investment and speculation. [There is a] a good argument that they should be treated like financial products.
The Australian Securities and Investments Commission (ASIC) and one of Australia’s “Big 4” banks, the Commonwealth Bank reportedly also support regulating crypto as a financial product, according to SMH.
Crypto execs warn of ‘broad’ approach
However, crypto market participants have been cautious about a broad approach to crypto assets.
Speaking to Cointelegraph, blockchain and digital assets lawyer and Partner at Piper Alderman, Michael Bacina, warned that “a broad approach to classifying technology as a financial product without a clear and workable path to licensing and compliance will send more crypto businesses offshore . and create more risk.”
Adam Percy, General Counsel of Swyftx, echoed these sentiments in a statement to Cointelegraph, stating:
“The trick is to protect consumers without regulating well-run domestic digital asset businesses and forcing people to use onshore exchanges that are subject to less stringent checks and balances.”
Meanwhile, Holger Arians, CEO of on-ramp crypto provider Banxa noted concerns that over-regulation could “seriously affect” the pioneering role Australia is playing in crypto.
Caroline Bowler, CEO of Australian crypto exchange BTCMarkets also warned against a “prescriptive approach” to regulation.
“This may put our digital economy behind, in time, reducing our international competitiveness.”
Australia’s financial regulator has yet to formally formulate a regulatory framework, but since the FTX incident in November, Australian politicians and their global partners have moved more quickly into action.
Jones said the collapse of FTX “casts doubt” on the need for crypto regulation.
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In September, Australian crypto entrepreneur and investor Fred Schebesta warned that the rush to map tokens could be a problem for the industry.
The complexities of token mapping are unclear and Australia’s “nascent” crypto industry needs to “align with other major markets and their regulations,” he said.
Crypto lobby group Blockchain Australia agreed, arguing that treating all crypto assets as financial products would undermine crypto sector investment, and innovation, and lead to industry-related job losses.