Australia's Digital Asset Regulation Strategy: A New Approach to the Cryptocurrency Industry
Date: 2025-03-21 Author: Henry Casey Categories: IN WORLD
The proposed strategy aims to combine innovation in the cryptocurrency sector with consumer protection, ensuring stability and transparency in the market.
The draft law will be submitted for public consultation this year. It is expected that the new law will apply to cryptocurrency exchanges and custodians, including their activities under the current financial services legislation. Companies operating in this area will be required to comply with customer asset protection requirements, as well as meet minimum capitalization standards. In addition, they will need to obtain a license from the AFSL (Australian Financial Services Commission).
However, not all participants in the digital economy will be affected by the new rules. Small platforms, blockchain developers and companies whose products are not related to financial products will not be required to follow the new regulations. Payment stablecoins will be regulated in the same way as traditional payment systems, but some types of stablecoins and wrapped tokens may be exempt from taxation.
One of the important aspects of the new plan is the government working with Australia’s largest banks to address the problem of debanking cryptocurrency companies when they are denied banking services. Research into central bank digital currencies (CBDCs) is also planned, as well as the creation of a regulatory sandbox that would allow firms to test their financial products without the need for a license.
The reforms could be at risk if the political arena changes. The federal election, which takes place before May 17, 2025, could affect the future of regulation. Prime Minister Anthony Albanese’s Labor Party and Peter Dutton’s opposition coalition will compete for control. The opposition has already said that if it wins, it will prioritize regulation of the crypto industry.
Representatives of the crypto sector have expressed support for the proposed reforms. BTC Markets CEO Caroline Bowler noted that these changes will help Australia remain competitive in the global market. However, she stressed the importance of clarifying some aspects, such as capitalization and custody requirements, to avoid negative consequences for investments. Jonathan Miller, Managing Director of Kraken Australia, added that the urgent need for new laws is due to legal uncertainty and debanking issues that are holding back the industry.
It is worth noting that in December 2024, ASIC accused Binance of consumer abuse, which led to significant losses due to risky derivatives.
