Australia Moves to Regulate Crypto with New Draft Legislation
Sydney, Australia – Australia is poised to become a leader in digital asset regulation with the release of draft legislation aimed at bringing cryptocurrency platforms under the umbrella of existing financial services laws. The move, announced Wednesday by Assistant Treasurer Daniel Mulino at the Digital Economy Council of Australia’s Global Digital Asset Regulatory Summit, seeks to bolster consumer protections and provide much-needed clarity for the burgeoning crypto industry.
The proposed framework represents a “cornerstone” of the government’s digital asset roadmap, unveiled in March, and aligns Australia with international efforts to regulate the rapidly evolving crypto landscape. “This is about legitimizing the good actors and shutting out the bad,” Mulino stated, emphasizing the dual goal of fostering innovation while mitigating risk.”It is indeed about giving businesses certainty and consumers confidence.”
Key Provisions of the draft Legislation:
The bill introduces two distinct categories within the Corporations Act: digital asset platforms and tokenized custody platforms. Crucially, operators within these categories will be required to obtain an Australian Financial Services (AFS) license. This licensing requirement will be coupled with stringent obligations, including:
* Conflict of Interest Management: Ensuring platforms operate with transparency and prioritize client interests.
* Dispute Resolution Systems: Providing accessible and effective mechanisms for resolving consumer complaints.
* Custody and Settlement Standards: Implementing robust security measures to safeguard client assets.
the legislation also addresses emerging areas within the crypto space, specifically outlining rules for wrapped tokens, public token infrastructure, and staking. Mulino explained that these areas have historically struggled to fit within existing financial frameworks, and the new rules will provide a tailored approach. “This means they will no longer have to be forced into frameworks that were never designed for them,” he said.
Addressing Recent Failures & Consumer Concerns:
The push for regulation comes in the wake of high-profile collapses within the crypto sector, which exposed critical gaps in consumer safeguards, especially concerning the pooling and holding of client assets. According to Mulino, the legislation directly addresses these vulnerabilities by extending “well-understood and time-tested Australian financial services frameworks to target the riskiest parts of these businesses.”
What This Means for the Future of Crypto in Australia:
This draft legislation signals a proactive approach from the Australian government,aiming to create a stable and secure habitat for the growth of the digital asset industry. By bringing crypto platforms into the fold of traditional financial regulation, Australia hopes to attract legitimate businesses, protect consumers, and solidify its position as a key player in the global digital economy. The bill is now open for public consultation before being finalized and put to a vote in Parliament.
Keywords: Australia, Crypto Regulation, Cryptocurrency, Digital Assets, Blockchain, Financial Services, AFS License, Digital Economy, Consumer Protection, Daniel Mulino, Regulation, Fintech.