Australian Crypto Firms Lobby For Better Regulation

Australian crypto firms are lobbying the government for clear regulation of the industry. 

Among the firms responding to the government’s call for submissions on establishing a regulatory framework are cryptocurrency broker Swyftx, crypto exchange Kraken, and R3, an enterprise software platform. 

In its letter to the Senate Select Committee on Australia as a Technology and Financial Centre, Swyftx pushed for “clear and robust registration and licensing requirements for digital asset service providers.” Swyftx also argued that the government needs to “prevent traditional banks withholding services to digital asset providers (acting as unauthorized gatekeepers to the system).”

The cryptocurrency broker claimed that banks have been unwilling to do business with digital assets companies on an “ill-advised notion of increased risk.” 

But what exactly are these firms proposing? 

Crypto firms’ wishlists

The crypto firms want regulatory clarity for the industry in order to ease concerns from banking institutions as well as potential customers. 

According to Kraken, existing regulation does not adequately meet this need. “We encourage policy makers to carefully assess the risks that virtual assets pose and consider alternative regulatory approaches that are fit for purpose,” the exchange wrote in its own submission to the Select Committee. 

Kraken broke down this would-be wishlist of bespoke crypto regulation into four categories—licensing regimes, a travel rule, stablecoins, and crypto derivatives. 

The exchange argued that digital currency exchanges—much like itself—should only be regulated to address money laundering, terrorism financing, and sanctions risks. The firm accepted the need for a travel rule, but said a “phased-approach” was required to implement one, and that it was unclear whether or not it should apply to stablecoins. 

Lastly, Kraken argued that futures contracts that reference digital assets should not fall within the Australian Securities and Investments Commission’s remit. 

R3 echoed Kraken’s view that existing financial services regulations are not sufficient for the crypto industry, and a bespoke regulatory framework would provide better clarity for the industry. 

“Layering additional regulations on top of already robust and effective frameworks would only complicate the industry and inhibit innovation with no resulting upside,” the firm said.