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- 1 To meet global standards, the Australian government proposed a regulatory framework for cryptocurrency framework.
- 2 It is aimed to protect consumer interests by regulating crypto activities.
The Australian government issued the regulatory framework that will use the Australian Financial Services License (AFSL) framework for consistent oversight. The government said they want to mitigate crypto risks for consumers and for this, they need for a regulatory framework is a must.
This framework is for the entities providing access to digital assets and holding them for Australians. This is considered an important step in the government’s approach towards crypto improvement in the Australian context.
Consulting Paper Acts like a Guide for Crypto Activities
The consultation paper stated, “The proposed regulatory framework would apply to digital asset service providers that present the same risks to entities that operate in the traditional financial system.”
This specifies that the Australian government plans to use the existing regulation for traditional financial institutions. These will behave as an usher for regulating the crypto activities in the country.
The response to the consultation paper can be submitted up until December 1, 2023. Interested parties are invited to give their opinion regarding the consultation. The submissions may be put forward through post or electronically via email etc.
The framework seeks to support the Australian Financial Services Licence (AFSL) framework to regulate the crypto exchanges to confirm consistent surveillance and protection for consumers.
However, it also quotes the dynamic nature of the crypto industry. Hence, stated, “implementation of the proposed framework is subject to future legislative design and development.”
The proposed framework aims to fulfill many objectives including consumer protection, their interest, and promoting innovation. Moreover, it highlights bringing Australia’s digital asset framework in line with the global standards.
Consultation Paper Includes Unbiased Outlook for Traditional and Crypto Finance organizations
The consultation paper equally emphasized building a fair landscape for both traditional financial institutions and digital asset finance organizations. It is thus implied that global recognition is the key priority.
The main focus of the framework is securing consumers from the risks related. It also stated that many digital assets do not fall under the category of financial products. Relating this the paper further stated digital assets used in activities like video gaming, metaverse, and gambling.
It proposed that further explanation could be attained by making changes to the Corporation Act 2001. This would initiate a new financial product category to regulate these specific activities.
Besides this, the Commonwealth Bank of Australia in 2021 disclosed its plan to launch a digital assets trading app within its banking app for standard release in 2022. The bank had aimed to combine with both crypto exchange firm Geminin and blockchain analysis firm Chainalysis.
On April 5, Australian Senator Andrew Bragg also introduced a draft bill in the country that is to protect consumers and promote investors.
Summary
The Australian Government intends to introduce a regulatory framework to protect consumers from the harms of digital assets while also supporting innovation. It mandates crypto exchanges to stick to Australian financial services laws (AFSL).
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
