Australia's government has unveiled a comprehensive plan to regulate the cryptocurrency sector, aiming to integrate digital assets into the broader economy while ensuring consumer protection and market integrity. This initiative aligns with frameworks established by the European Union and Singapore.
Key Components of the Proposed Framework:
Licensing and Governance: Digital Asset Platforms (DAPs), encompassing crypto exchanges and custody services, will be mandated to obtain an Australian Financial Services Licence (AFSL). These platforms must adhere to governance standards akin to traditional financial institutions, including capital adequacy and disclosure requirements.
Stablecoin Regulation: Issuers of payment stablecoins will fall under the new regulatory regime, ensuring they meet specific compliance obligations to maintain financial stability.
Debanking Concerns: Addressing the issue of debanking—where financial institutions deny services to crypto-related businesses—the government plans to collaborate with major banks to mitigate such practices, fostering a more inclusive financial environment.
Central Bank Digital Currency (CBDC) Exploration: The government will assess the potential of introducing a central bank digital currency and plans to launch an Enhanced Regulatory Sandbox in 2025. This initiative will allow financial firms to test new products without a licence, promoting innovation within a controlled environment.
Industry leaders have largely welcomed these developments. Jonathan Miller, Managing Director of Kraken Australia, emphasized the importance of bespoke legislation to reduce uncertainty, stating that clear regulations can eliminate barriers hindering growth in the Australian economy.
The government intends to release draft legislation for public consultation within this year, with the aim of finalizing the regulatory framework by 2025.
