Australian Senator Unveils Private Bill To Hasten Crypto Regulation
The Australian Parliament has been presented with proposed legislation suggesting guidelines for offering crypto services nationwide. The Digital Assets (Market Regulation) Bill 2023, submitted by Senator Andrew Bragg, aims to safeguard consumers and encourage investors through a range of regulatory proposals for exchanges, licensing, stablecoins, and custody requirements.
Australia’s Crypto Regulatory Environment
In Australia, regulatory modifications are commonly brought forward by government ministers. Nonetheless, the Parliamentary Education Office’s guidelines reveal that private members or senators can initiate bills, which may take several months or even years to pass through the parliamentary process.
Meanwhile, Bragg included additional details in the private bill. He criticized the present Labor government for failing to implement 12 cryptocurrency regulation recommendations by the Senate Select Committee in October 2021 to make the country a Technology and Financial Centre.
Furthermore, the senator emphasized that the Australian government’s failure to provide regulatory clarity for digital assets forced crypto enthusiasts in Australia to use offshore platforms. This exposed them to industry-wide incidents, bankruptcies, and collapses such as the FTX collapse and the LUNA crisis.
“Australia can become a hub for digital assets while simultaneously safeguarding the interests of digital asset consumers, but it is crucial to take action now,” Bragg added. This act establishes a comprehensive regulatory framework covering custody services, stablecoin issuance, and cryptocurrency exchanges.
This framework is designed to protect consumers and encourage investment in these sectors. Additionally, the act seeks to establish guidelines for licensed deposit-taking institutions to report information related to the issuance and management of a CBDC.
Bill Will Mandate Crypto Firms To Obtain Operational License
Assuming it is approved, the proposed bill would mandate individuals or businesses intending to operate an exchange, offer custody service, or issue stablecoin in Australia to possess a license. More importantly, this license must be issued by the Australian Securities and Investments Commission or a foreign licensing authority.
Also, the bill outlines a range of obligations and prerequisites for custody services, stablecoin issuers, and exchanges. These include segregating customer funds, reporting on customer holdings, capital or minimum reserve requirements, disclosure arrangements, auditing, and assurance procedures.
Meanwhile, the UK is conducting a public consultation to determine the classification of digital asset tokens, cryptos, services, and platforms. The country launched the “token mapping” consultation paper last month through the UK Treasury.
The paper presented fundamental definitions for the cryptocurrency sector to prevent ambiguity. In this document, the financial authority highlighted that there is no need for separate legislation as the existing Financial Services and Markets Act can cover digital assets.
However, other countries, such as the US, are working on separate regulations for crypto, although some officials believe they should treat crypto like traditional assets.
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