Australia plans to publish a draft law governing licensing and custody requirements for suppliers of digital assets by 2024. Once the law is passed and becomes enforceable, exchanges will have a year to adapt, according to a statement from the Australian Treasury on Monday. According to the schedule, it could not be possible for an Australian digital asset platform to get a license under the recently proposed framework until 2025.
However, the moves represent some of Australia’s government’s most important steps toward creating cryptocurrency legislation. The plan was initially announced in February 2023, with a mid-2023 delivery date anticipated. Separate from a previous consultation paper on token mapping is the postponed October consultation paper. Token mapping is the process of determining the main operations and features of cryptocurrency products and mapping them against the legal frameworks already in place.
The proposal’s release was timed to coincide with a lecture delivered at the Australian Financial Review Crypto Summit (AFRCM) by Australia’s Assistant Treasurer and Minister for Financial Services, Stephen Jones. AFR was the first to report on the proposal’s specifics.
Michael Bacina, a digital asset lawyer at Piper Alderman and the chair of Blockchain Australia, told CoinDesk from the Summit that Australia has been waiting for clarity on the legislation of digital assets so that it may try to catch up with the rest of the world. This strategy prioritizes consumer protection and encompasses a broad range of business models that currently lack regulatory oversight. NFT marketplaces that hold customer assets may also fall under the licensing requirement.
Any cryptocurrency exchanges that hold more than AUD 1,500 ($946) in assets for any one client or more than AUD 5 million ($3.15 million) in total assets are reportedly required to have an Australian Financial Services license from the Australian Securities and Investments Commission. By December 1, 2023, the paper is looking for written entries that address one of 32 themes.
Adam Percy, General Counsel of local cryptocurrency exchange Swyftx, emphasized the importance of a fair and equitable regulatory environment for both domestic and international crypto platforms. He commended the government’s consultation process for its thoughtful approach, balancing consumer protections with room for innovation.
Dr. Brad Jones, Assistant Governor (Financial System) at the Reserve Bank of Australia, announced that the Treasury and Reserve Bank of Australia will collaborate on a report summarizing their research on central bank digital currency (CBDC) in Australia. This report, expected to be published around mid-2024, will also outline a plan for future CBDC-related endeavors.
Due to a number of unsolved difficulties that came to light at the conclusion of the pilot project, Australia decided earlier this year to delay making any decisions regarding a CBDC for a number of years.