On Wednesday, Australian opposition senator Andrew Bragg proposed a new bill to develop a licensing scheme for cryptocurrency exchanges.
If enacted, the measure will compel crypto exchanges in Australia to receive a license in order to operate lawfully, bringing them in line with other financial service companies in the country who are also required to obtain licenses.
The Digital Assets (Market Regulation) Bill 2023, filed as a private senator’s bill by Bragg, aims to safeguard consumers and encourage investment in digital assets by implementing regulatory measures.
In addition, the bill provides regulations for stablecoins and custodial requirements. While ministers often introduce new regulatory amendments in Australia, the Parliamentary Education Office notes that private members and private senators can also submit legislation.
Senator Bragg also slammed the current labor administration for failing to enact multiple crypto regulatory measures. In October 2021, the Australian Senate Select Committee introduced this legislation as a Technological and Financial Centre.
Regulation In The Spotlight
Regulation is the focal point of the crypto business in numerous jurisdictions. Senator Bragg stated that Australia’s vulnerability to industry-wide catastrophes, such as the FTX collapse, stems from the government’s incapacity to maintain regulatory certainty.
He asserted that Australia has the potential to become a hub for digital assets while also ensuring the protection of consumers of digital assets. However, he further stated that it is crucial to take action immediately.
This proposed regulation comes amid intensifying scrutiny of the crypto industry in Australia as well as worldwide. The Australian Transaction Reports and Analysis Centre (AUSTRAC) began legal action against Binance and Coinbase in 2018. These two exchanges allegedly violated laws against money laundering and sponsoring terrorism.
The proposed framework imposes various business requirements, including maintaining transaction records and compliance with know-your-customer (KYC) and anti-money laundering laws.
The measure would apply the same regulations to both cryptocurrency custody providers and stablecoin issuers in Australia. The legislation creates a variety of responsibilities and requirements for exchanges, custody services, and stablecoin issuers.
This involves meeting minimum capital or reserve requirements, separating customer funds, producing reports on customer holdings, conducting audits, guaranteeing transparency, and publishing pertinent information.
If the bill is passed, Australia will join a growing number of countries, like the United States, Japan, and the European Union, that have introduced legislation for the cryptocurrency sector.
Categorizing And Defining Cryptocurrencies
A public consultation is being conducted in Australia regarding the categorization of digital assets, tokens, services, and platforms associated with cryptocurrencies.
The “token mapping” consultation document was published in February. This document gives information about crypto’s essential definitions and the sector as a whole.