The Australian federal government plans to introduce a draft legislation which covers and regulations for cryptocurrency exchanges to hold a financial services license issued by the local financial regulator.
As per the announcement from Australia Treasury on October 16, this legislation is expected to be drafted by 2024.
Once it becomes law, cryptocurrency exchanges will have 12 months to adapt to these new rules. This means that it could take until 2025 for a cryptocurrency exchange in Australia to obtain a license under these new regulations.
Nevertheless, this proposal paper marks a significant move by the Australian government to establish a clear policy for regulating the cryptocurrency industry. The new regulations are expected to protect consumers from fraud and scams, and to ensure that cryptocurrency exchanges operate in a fair and transparent manner.
The proposal, initially introduced in February 2023, was anticipated to be officially released around the middle of 2023. However, it has been delayed until October. It’s important to note that this October consultation paper is different from an earlier document related to token mapping.
Token mapping involves the process of identifying the primary functions and activities of cryptocurrency products and aligning them with the existing regulatory rules.
The proposal unveiled on Monday recommends that cryptocurrency exchanges in Australia must obtain a license from the Australian Securities and Investments Commission (ASIC) if they hold more than $946 of any individual client’s assets or have a total asset value exceeding $3.15 million.
The document contains inquiries about 32 different topics and invites written feedback until December 1, 2023.
The release of the proposal happened at the same time as a speech delivered by Stephen Jones, who serves as Australia’s Assistant Treasurer and Minister for Financial Services, at The Australian Financial Review Crypto Summit (AFRCM). The details of what the proposal will include were first reported by AFR.
Dr Brad Jones, Assistant Governor (Financial System) at the Reserve Bank of Australia said, “Joint report around the middle of 2024 that will provide a stocktake on central bank digital currency (CBDC) research in Australia and set out a roadmap for future work.”