In light of the worrying events that have transpired in the crypto market over the past few weeks, the government of Australia has moved to ramp up safety and regulation for crypto.
Australian Treasury seeks to set up a regulatory framework
According to the island nation’s Department of Treasury, reforms are required to modernize Australia’s financial system in order to respond to future challenges.
As per a press release by the Treasury, a framework for the licensing and regulation of crypto service providers will be established in 2023.
The Australian government has also announced that it will release a consultation paper in early 2023. This will help regulators determine which digital assets should be regulated by financial services laws. The consultation paper will also provide clarity on appropriate custody and licensing settings to protect consumers.
Further innovation with the right regulatory approach
Australian Treasurer Jim Chalmers has clarified in his statement that the government will consult on matters relating to its ongoing token mapping work, before introducing any legislation. “Our reforms are about starting to fix that in pursuit of a financial system that is stronger and more secure,” Chalmers added.
The treasurer acknowledged the opportunities and risks associated with a nascent technology like blockchain. According to him, the government of Australia plans to foster innovation while making sure that the investors are protected by proper regulations in place.
CBDCs and stablecoins in Australia
The proposed consultation paper will address various elements of the crypto ecosystem, including stablecoins and central bank digital currencies (CBDCs). The CBDC of Australia’s central bank is currently in its pilot phase and is expected to conclude in mid-2023.
The Reserve Bank of Australia published a report earlier this month that addressed stablecoins. The report concluded that “stablecoins have the potential to enhance the efficiency and functionality of a range of payment and other financial services.” This comes as an optimistic outlook, given the current climate in the crypto industry.
