The Australian Labor Party (ALP), which has been in office for three months, has finally spoken out about its plans for crypto regulation and how the government will improve how Australia’s system manages crypto assets.
A senate inquiry report last year on “Australia as a Technology and Financial Center” was warmly welcomed by the industry, which had been waiting impatiently to see if the ALP government would adopt it. Treasurer Jim Chalmers announced a “token mapping” exercise, which was one of the 12 recommendations.
The token mapping initiative, which is planned to be finished before the year is through, aims to “determine how crypto assets and related services should be governed” and guide future regulatory choices.
The Treasury will also start working on some of the other suggestions soon, such as a licensing framework for crypto asset service providers dealing in non-financial product crypto assets, suitable requirements to protect consumer crypto asset custody, and a review of the decentralized autonomous organization (DAO) company-style structure.
The government headed by Prime Minister Anthony Albanese says it wants to rein in a “largely unregulated” crypto sector in a statement from Treasurer Jim Chalmers, Assistant Treasurer and Minister for Financial Services Stephen Jones, and Assistant Minister for Competition, Charities and Treasury Andrew Leigh:
“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.”
More than a million taxpayers have connected with the cryptocurrency ecosystem since 2018, but “regulation is struggling to keep pace and adapt with the crypto asset sector,” according to the statement.
According to the MPs, the previous administration, which was led by the Liberals, had “dabbled” in regulating crypto assets through crypto secondary service providers “without first knowing 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.”
Michael Bacina, a partner at Piper Alderman, told Cointelegraph that the token mapping endeavor will be a “critical step” in bridging the substantial knowledge gap between policymakers and regulators.
In the current state of blockchain, “Australia punches above its weight, but we have seen regulatory uncertainty lead to enterprises leaving Australia,” he said.
Token Mapping
“A reasonable token mapping exercise that assists regulators and policymakers in better understanding the activities they are seeking to regulate as well as how technology interacts with those activities should help regulation be fit for purpose and both support innovation and jobs in Australia while protecting consumers,” he continued.
BTC Markets CEO Caroline Bowler said the action echoes pleas from many in the sector for “proportional, proper regulation” of the business.
“Token mapping has numerous further advantages. It will help enterprises create their own blockchain-based innovations, give direction to digital currency exchanges, and give investors in cryptocurrencies more clarity. It will also help authorities create an acceptable regulatory framework, she added.
Aaron Lane, a senior lecturer at the RMIT Blockchain Innovation Hub, thinks the Labor government is using the token mapping process as a sort of stalling tactic:
“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 had to use a token mapping exercise to buy themselves some time while they caught up.
