The newly elected Australian government has announced a “token mapping” exercise as an approach to crypto regulation in the country. The exercise is one of the 12 recommendations in a senate inquiry report of 2021 on “Australia as a Technology and Financial Center”. This will be conducted before the end of the year.
The exercise is expected to help identify how crypto assets and related services should be regulated and help with future regulatory decisions. Moreover, the Treasury will also undertake work on some of the other recommendations. This includes 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.
Jim Chalmers, the Treasurer, Stephen Jones, the Assistant Treasurer and Minister for Financial Services, and Dr. Andrew Leigh, the Assistant Minister for Competition, Charities, and Treasury, in a joint statement, said it will reign in on a largely unregulated crypto sector. It highlighted that the crypto sector is largely unregulated. As such, they need to work to get the balance right in an effort to embrace new and innovative technologies. The statement said more than one million taxpayers have interacted with the crypto ecosystem since 2018. But, regulation is still struggling to keep pace and adapt within the crypto asset sector.
The politicians said the previous government had dabbled in crypto asset regulation through crypto secondary service providers. They had not understood what was being regulated. The statement pointed out that the Albanese Government is taking a serious approach to working out what is in the ecosystem and what risks need to be looked at first.
Michael Bacina, a partner at Piper Alderman, said the token mapping exercise will be a crucial step to bridge the significant education gap between regulators and policymakers. He pointed out that they have already seen that regulatory uncertainty leads to businesses leaving Australia.