Australian Treasurer Jim Chalmers said that his government will improve the way Australia’s system manages crypto assets and provide greater protections for consumers.
Three months after being elected into power, the Australian Labor party has finally broken its silence on how it’s planning to approach crypto regulation.
Treasurer Jim Chalmers announced a “token mapping” exercise, which was one of the 12 recommendations in a senate inquiry report last year on “Australia as a Technology and Financial Center.” The report was warmly welcomed by the industry which has been anxiously waiting to see if the ALP government would embrace it.
Aimed at being conducted before the end of the year, the token mapping exercise is expected to help “identify how crypto assets and related services should be regulated” and inform future regulatory decisions.
Cointelegraph understands that Treasury will also undertake work on some of the other recommendations in the near future, including a licensing framework for crypto asset service providers dealing in non-financial product crypto assets, appropriate requirements to safeguard the consumer crypto asset custody, and a review of the decentralized autonomous organization (DAO) company-style structure.
In a statement from Treasurer Jim Chalmers, along with Assistant Treasurer and Minister for Financial Services Stephen Jones, and Assistant Minister for Competition, Charities and Treasury Dr. Andrew Leigh, the Albanese-led government says it wants to reign in on a “largely unregulated” crypto sector.
“As it stands, the crypto sector is largely unregulated, and we need to do some work to get the balance right so we can embrace new and innovative technologies
The statement noted that more than one million taxpayers have interacted with the crypto ecosystem since 2018, and yet, “regulation is struggling to keep pace and adapt with the crypto asset sector.”
The politicians claimed that the previous Liberal-led government had previously “dabbled” in crypto asset regulation through crypto secondary service providers “without first understanding what was being regulated.”
“The Albanese Government is taking a more serious approach to working out what is in the ecosystem and what risks need to be looked at first.”
Speaking to Cointelegraph, Michael Bacina, partner at Piper Alderman, said the token mapping exercise will be an “important step” to bridge the significant education gap within regulators and policymakers.
“Australia punches above its weight in blockchain right now but we have seen regulatory uncertainty lead to businesses leaving Australia,” he said.
Related: Australia’s world-leading crypto laws are at the crossroads: The inside story
“A sensible token mapping exercise which helps regulators and policy makers understand in depth the activities they are looking to regulate and how the technology interfaces with those activities should help regulation be fit for purpose and both support innovation and jobs in Australia while protecting consumers,” he added.
Caroline Bowler, CEO of BTC Markets said the move mirrors calls from many in the industry for “proportional, appropriate regulation” of the sector.
“The additional benefits of token mapping are many. It will provide greater clarity to crypto investors; aid companies in developing their own blockchain-based innovations; provide guidance to digital currency exchanges; as well as assist regulators in shaping an appropriate regulatory regime,” she said.
However Dr. Aaron Lane, a senior lecturer at the RMIT Blockchain Innovation Hub, believes the token mapping exercise is something of a delaying tactic by the Labor government:
“Progress is progress — but it is disappointing that we are not further along the path to greater regulatory certainty for industry and greater protections for consumers.”
“Unfortunately, they’ve needed to buy themselves time with a token mapping exercise to allow them to get up to speed,” he added.
Progress is progress. But let's be clear though – it is not the first time token mapping has been done. See this, for example, from the UK in 2019. #cryptolaw https://t.co/rghWmklDJv
— Aaron Lane (@AMLane_au) August 21, 2022