The Australian Government is improving the way the country’s regulatory system manages crypto assets to keep up with developments and provide greater protections for consumers.

Australians are experiencing a digital revolution across all sectors of the economy, but regulation is struggling to keep pace and adapt with the crypto asset sector. The Australian Taxation Office (ATO) estimates that more than one million taxpayers have interacted with the crypto asset ecosystem since 2018.

Australia’s crypto sector is currently unregulated, and consumers have been experiencing a rise in financial loss when dealing with cryptocurrencies. The Treasury, along with other government agencies, are working to get the balance right in embracing new and innovative technologies while safeguarding consumers.

The Australian Government is ready to start consultation with stakeholders on a framework for industry and regulators, which allows consumers to participate in the market while also better protecting them.

As the first step in a reform agenda, Treasury will prioritise ‘token mapping’ work in 2022, which will help identify how crypto assets and related services should be regulated. This hasn’t been done anywhere else in the world, so it will make Australia the leader in this work.

With the increasingly widespread proliferation of crypto assets – to the extent that crypto advertisements can be seen plastered all over big sporting events – the government is keen to ensure that customers engaging with crypto are adequately informed and protected.

While the previous government dabbled in crypto asset regulation but prematurely jumped straight to options without first understanding what was being regulated, the current government is taking a more serious approach to work out what is in the ecosystem and what risks need to be looked at first.

The aim will be to identify notable gaps in the regulatory framework, progress work on a licensing framework, review innovative organisational structures, look at custody obligations for third party custodians of crypto assets and provide additional consumer safeguards.

A public consultation paper on ‘token mapping’ will be released soon.

Source: Treasury of Commonwealth Australia media release. Content has been edited for style and length.

Eliza Sayon

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Eliza is a content producer and editor at Public Spectrum. She is an experienced writer on topics related to the government and to the public, as well as stories that uplift and improve the community.

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