Australia will introduce a new framework for regulating crypto firms next year as part of wider plans to modernize the country’s financial system.
In a statement, Treasurer Jim Chalmers and Assistant Treasurer Stephen Jones said “regulatory architecture” had not kept pace with changes in the market, “including the advent of new digital products and services.”
A consultation paper will be released in early 2023 to determine what digital assets should be regulated and help put in place “appropriate custody and licensing” rules.
The move represents the next steps for the relatively new Government, which came to power in May under Prime Minister Anthony Albanese.
“In many areas, the previous government sat on its hands. In other areas, it made announcements but didn’t deliver,” the Treasury said.
“In its first six months, the Albanese Government has demonstrated its mature and methodical approach to delivering reform.”
The treasury previously announced that its framework would be better-informed than any other regulation in the world. Its approach centers on “token mapping,” a kind of market research that allows the authorities to evaluate how different assets and services should be regulated.
The Government also outlined plans on Wednesday to update the country’s payments systems, strengthen its financial market infrastructure, and regulate Buy Now, Pay Later products like Afterpay, Openpay, and Klarna.
Australia beefs up crypto credentials
Australia has stepped up its oversight of crypto on multiple fronts this year, with the federal police even setting up a dedicated crypto unit.
The Australian Securities and Investments Commission (ASIC) also expanded the size of its crypto team in September to have better oversight of the sector. But executive director for markets, Greg Yanco, made it clear at the time that ASIC would not become a “cheerleader” for crypto.
Meanwhile, the country’s central bank expects to complete a pilot for its own central bank digital currency (CBDC) by mid-2023.