For some people, cryptocurrencies are complex and high-risk assets, which makes them difficult to understand despite their potential. This limitation has been shown a challenge for some governments while seeking regulatory clarity for crypto. The same problem has been considered by the Australian authorities who are planning to release a clear law for cryptocurrencies.
According to a new report, the Australian Department of Finance has announced a new timeline for crypto legislation in the country. Internal documents note that the release of Australia’s crypto laws could be extended to 2024, as the government wants to study the industry extensively before making a decision.
Decisions About Australia’s Crypto Legislation May Take Time
Australian people Financial Review taken several documents under the Freedom of Information Act indicate that the government intends to launch a consultation paper in the second quarter of 2023. The authority will also hold a roundtable stakeholder meeting in the third quarter of 2023 to discuss issues of licensing and custody of digital assets. .
The digital asset industry is eagerly awaiting the Australian government’s next step in the token mapping exercise announced in August 2022.
Australian Department of Finance declare on February 2nd the token mapping consultation paper was released. The department also said it is open to consultations to help the government understand the digital assets sector and develop an appropriate regulatory framework for digital assets.
Consultation process ended on March 3 to the public, but the final submission to the cabinet will not happen until later in the year. This delay in the final submission to the cabinet could drag the decision on the digital legislation to 2024 or more.
According to reports, a briefing from the Ministry of Finance admitted that they expected the mapping exercise to be challenging. Australia’s Treasurer, Jim Chalmers, said he expected complaints from digital businesses and consumer groups over the long-term implementation of the licensing regime.
He noted that consumer groups seeking immediate protection and businesses seeking to gain regulatory legitimacy would resent the delay.
In addition, token mapping can take a long time as the Treasury considers the current market conditions, reducing the demand for cryptocurrencies. The Australian government has announced the creation of a crypto policy unit within the Department of Finance.
However, the Treasury considers the risks associated with digital assets, which the collapse of FTX magnified, and requires a careful approach to regulation as the demand for digital assets decreases.
In a meeting with the Treasury in November 2022, the digital assets policy unit highlighted the requirements that could apply to digital licences. These requirements include ability/capacity tests, capital or financial constraints, and the obligation to report bad actors and fraud in the industry. The unit also discussed tightening consumer protection policies.
More Australians Can Own Crypto After Legislation
In September 2022, an Australian crypto exchange called Swyftx was launched survey. The survey revealed that approximately 1 million Australians are looking to buy cryptocurrency for the first time in the next 12 months, while 4.2 million already own crypto assets. This observation brings the total holdings of digital currency in the country to more than five million.
No one knows exactly what will happen when the Australian government finally loosens its digital asset laws. But it will give regulators the framework and clarity they need to oversee the digital industry. The likelihood is also high that it could lead to mainstream adoption of digital assets in Australia.
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