Crypto regulation is at the top of Australia’s to-do list in 2023

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(Kitco News) –  The global push to establish cryptocurrency regulation shows no signs of abating as authorities in Australia have announced their intention to establish a framework for the licensing and regulation of crypto service providers in 2023.

The move to regulate crypto is part of the country’s broader goal of modernizing its financial system according to a statement released by Hon Stephen Jones MP, Assistant Treasurer and Minister for Financial Services.

Along with the goal of establishing a crypto regulation framework, the government is also planning to “update and strengthen Australia’s payment system; strengthen its financial market infrastructure; and establish a regulatory framework for Buy Now Pay Later,” the report said.

Regulating crypto has become a point of focus for Australia ever since the collapse of FTX first made headlines, with the Australian government highlighting the importance of providing greater consumer protection laws as soon as possible.

“These reforms are all about ensuring we have a financial system that works for consumers, businesses and investors – one that delivers for the Australian economy and the Australian people,” the statement from Jones said.

The Minister for Financial Services went on to say that the previous government “sat on its hands” when it came to keeping pace with changes in the market, especially as it relates to new digital products and services. Getting the country up to speed with the latest developments will be a goal of Prime Minister Albanese’s government moving forward.

“We will work closely with regulators, industry, and consumer and business advocacy groups over the coming months to get these reforms right,” Jones said.

Focusing specifically on the crypto sector, the statement indicated that the Albanese government is preparing to take action designed to improve the regulation of crypto service providers and ensure that additional safeguards are put in place to protect Australians.

The next step in the ongoing ‘token mapping’ work includes the release of a consultation paper in early 2023 that will outline which digital assets should be regulated by financial services laws and provide details on the development of appropriate custody and licensing settings to safeguard consumers.

“Following the release of token mapping, the Government will consult on a custody and licensing framework next year before introducing legislation,” the statement from James concluded.

Australia first revealed its token mapping intentions in August of this year as part of its efforts to identify how crypto assets and related services might be regulated. The process involves an investigation into the various characteristics of all digital assets used in Australia to classify them based on their asset type, underlying code, and other defining technological features.

In September, the country created a crypto-monitoring task force as part of its efforts to reign in the unregulated crypto sector, and a draft bill was introduced by Liberal Party Senator Andrew Bragg that is designed to clamp down on digital asset exchanges, stablecoins, and China’s central bank digital currency, the e-Yuan.