Australian crypto exchanges have praised plans from the Australian Treasury to regulate cryptocurrency exchanges under pre-existing financial services licensing measures.
In an Oct. 16 consultation paper, the Treasury outlined a new suite of proposed regulations, that suggested regulating cryptocurrency exchanges under existing financial services rules as well as introducing a wealth of new guidelines for all Australian firms dealing in digital assets.
Speaking at the Australian Financial Reviews Crypto Summit event on Oct. 16, Australian Treasury Stephen Jones said the new regime was focused on three primary areas: providing a framework for industry growth and innovation, allowing regulatory certainty to crypto service providers, and ensuring that everyday consumers and their assets remain protected.
Australian crypto exchanges will be regulated under pre-existing financial services laws, suggests the latest consultation paper from the Treasury. https://t.co/V1Dr8DeZF8
— Cointelegraph (@Cointelegraph) October 16, 2023
Caroline Bowler, the CEO of BTC Markets told Cointelegraph she was pleased to have reached a new “key milestone” in the regulatory process and regarded the rules as a positive progression for the wider crypto industry in Australia.
“It’s a great next step for the Australian economy. Digital assets are so clearly the future of financial services. It is imperative the country keeps pace with our international peers, with a robust regulatory framework,” said Bowler.
Similarly, Adrian Przelozny, the CEO of Independent Reserve commended the Federal government on its recommendations to introduce stronger regulation and policy change, telling Cointelegraph that these new proposals could help restore trust in the crypto sector.
“We firmly believe these changes will drive investment, provide certainty to the sector and ultimately, increase consumer protection.”
The general counsel of Swyftx, Adam Percy, also agreed with much of the Treasury’s proposals, saying the primary focus should be ensuring that crypto investors can safely access the benefits of blockchain technology, while still allowing room for innovation.
However, Jonathon Miller, the Managing Director of Kraken Australia, told Cointelegraph he was concerned that the new rules would be stuffing the crypto industry into a TradFi-shaped box.
“Australia is now in the unfortunate situation where our regulation has taken a very long time, so we’re taking the approach of shoehorning crypto into existing financial services regulation,” said Miller.
Related: Rejection of crypto bill exposes Aussies to ‘unregulated market’ — Senator Bragg
Still, Miller admitted that the consultation paper was a step in the right direction, especially for providing much-needed regulatory certainty for crypto companies operating on Australian soil.
“We’re behind our global peers when it comes to implementing a crypto framework, so I appreciate the need to have something in place locally to provide certainty to platforms like ours,” he added.
Liam Hennessy, a partner at Clyde & Co — an international law firm that has been assisting in the consultation process — said that the newest proposal from the Treasury “makes sense” for the Australian crypto industry.
Hennessy explained that the new rules will help the nation catch up to jurisdictions such as the European Union who are further along in their efforts to better regulate crypto.
Additionally, he said the Australian Financial Services (AFS) licensing regime can be quite complicated, meaning that local cryptocurrency exchanges and digital asset service providers will need to begin preparing their applications now.
Magazine: Are DAOs overhyped and unworkable? Lessons from the front lines