Australia To Give A “Green Light” To Crypto Platforms

Australia may become among the few countries in the world that grant crypto exchanges “a green light” for operating. The Australian government is now seeking industry feedback to develop a “tick of approval” for crypto exchanges, as the administration acknowledges the fact that those platforms are the connection point between customers and digital assets.

According to Australia’s Digital Economy Minister Jane Hume, the regulatory framework would increase the confidence of Australians in crypto exchanges, adding that crypto investing would become safe and secure.

“The Morrison government wants to make sure that consumers can trust the exchanges that they use to buy crypto,” Hume added, speaking at a Blockchain Australia event.

The case with trust in crypto exchanges in Australia is very concerning, as two of the largest crypto companies in Australia - myCryptoWallet and Blockchain Global’s ACX – did not endure the pressure and collapsed in just two months' time, dragging in millions of dollars in customer funds.

The Australian government would seek new custody requirements for crypto assets, allowing investors to maintain access to their money at all times, according to Hume. However, the minister expressed her concerns about the volatile nature of cryptocurrencies and warned investors that there always is a risk when investing in the crypto market, and the Australian government should not be safeguarding crypto investors in the “land down under”.

“Crypto values will go up and down sure as eggs, and the government will not be protecting consumers from market volatility—and nor should they,” Hume added, highlighting that two of the largest cryptocurrencies to date – Bitcoin and Ethereum, erased one-third of their value since their respective all-time highs.

Crypto industry approves

Hume’s statement seems to have been accepted fairly well by the Australian crypto community, as spokesman for Swyftx, one of Australia’s largest cryptocurrency exchanges, noted that the “stamp of approval” would separate the working exchanges from the ill-equipped platforms, which could end up being culled in the process.

“Australia has one of the largest crypto adoption rates in the developed world. It makes complete sense for us to lead on regulation. But it isn’t going to be bloodless. We’re expecting collateral damage when the new licensing arrangements come into place.” the spokesman stated.

Meanwhile, crypto enthusiasts expressed their concerns about the regulations possibly producing the same outcome as to myCryptoWallet and ACX, but adding regulatory approval could ensure customers that their digital assets will be shielded from such events.

Crypto exchanges and “de-banking”

One of the most serious problems for Australia’s crypto community is the widespread refusal of traditional banks to work with crypto exchanges – a phenomenon not only seen in Australia. It turns out major banks blacklist such exchanges and their users can’t convert their crypto belongings to fiat currencies.

However, banks may reconsider their stance, since the regulatory clarity about the status of crypto exchanges in Australia would will not just reduce the customer risk that banks see, but also encourage them to enter the market.

Indeed, banks in Australia are starting to “break the ice” of crypto adoption, as Commonwealth Bank became the first and only Australian bank to allow customers to buy and sell crypto assets, which happened in November 2021.