Australia to Bring Crypto 'Out of the Shadows' With New Regulatory Framework

As part of a sweeping modernization of Australia's payment systems, the Australian government will overhaul the regulatory framework around cryptocurrency exchanges.

Noting that over 800,000 Australians have owned a form of cryptocurrency, Treasurer Josh Frydenberg said that the government is "broadening out the definition of the services and the products that can be regulated," in an interview with 7News Australia.

"We're taking this area out of the shadows and bringing it into a considered regulatory framework, which is world-leading," said Frydenberg, adding that, "We want those businesses that are buying and selling cryptocurrencies to be properly licensed," in order to "provide greater certainty and security to those people who are transacting in that area."

According to Reuters, the Australian government will begin consultation on establishing a licensing framework for digital exchanges in early 2022, and will consult on regulating businesses that hold crypto on behalf of their customers.

Australia's treasury will also work alongside the country's central bank on a CBDC (central bank digital currency).

MyCryptoWallet collapse

Frydenberg's announcement comes in the wake of the collapse of Australia-based crypto exchange MyCryptoWallet, which called in the firm SV Partners on Wednesday to liquidate its assets and deal with creditors.

The move follows several months of reports that users of the exchange were unable to access their funds, according to the Australian Financial Review.

It's not the first Australian crypto exchange to go under this year; in October, Melbourne-based firm Blockchain Global Limited, operators of the crypto exchange ACX, collapsed into administration owing creditors $21 million, per the Sydney Morning Herald.