Australia Receives Crypto Certainty As New Regulation Fosters 'Room For Innovation'

Australia's Treasury unveiled draft legislation concerning licensing and custody guidelines for cryptocurrency asset providers.

Once this legislation is ratified, exchanges will be provided a 12-month window to adjust to the new framework, Coindesk reported.

The earliest an Australian digital asset platform could secure a license under this proposed system will likely be 2025.

These advancements signify Australia's strides in formulating a comprehensive cryptocurrency regulation policy. Insights into such evolving global digital asset regulations are anticipated to be a focal point at Benzinga's Future of Digital Assets conference on Nov. 14.

While the proposal was initially slated for release in mid-2023 after its announcement in February, the recent unveiling stands distinct from a previous token mapping consultation.

Token mapping delineates the process where core functionalities of cryptocurrency products are aligned with pre-existing regulatory standards.

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"Australia has been waiting for certainty over digital asset regulation so it can seek to catch up with the rest of the world," Michael Bacina, a digital asset attorney at Piper Alderman, said.

Bacina highlighted the consumer-centric nature of the proposed approach, emphasizing its potential to regulate previously unregulated sectors, including non-fungible tokens.

The recent proposal recommends that cryptocurrency exchanges holding over AUD 1,500 ($946) for any individual client or exceeding AUD 5 million ($3.15 million) in aggregate assets should obtain an Australian Financial Services license from the Australian Securities and Investments Commission.

The document, addressing 32 thematic queries, invites written feedback by Dec. 1, 2023.

Swyftx General Counsel Adam Percy expressed his desire for a balanced regulatory environment for both local and international crypto platforms, lauding the government's "thoughtful" approach that fosters "room for innovation."

Additionally, a collaborative report between the Treasury and the Reserve Bank of Australia is slated for a mid-2024 release, shedding light on central bank digital currency (CBDC) research in Australia, as shared by Dr. Brad Jones from the Reserve Bank of Australia.

It's noteworthy that Australia had earlier postponed any CBDC-related decisions due to challenges encountered during the pilot phase earlier in the year.

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