New Regulatory Laws And Licensing Frameworks For Crypto Companies In Australia

Modern-day economies around the globe already recognized the power of cryptocurrencies, and instead of banning them, they are seeking ways to push clarity into the subject and regulate cryptocurrencies in the best way possible.

Australia joins the long list of currencies currently considering crypto regulations, as Australian lawmakers will soon create a licensing framework for cryptocurrency exchanges.

This is the final stretch on a year-long effort of Australia’s Select Committee on Australia as a Technology and Financial Centre for addressing various topics about transforming the country into a stronger technology and finance center, including the opportunities and risks in the digital asset and cryptocurrency sector.

In its final report, dated from October 2021, the Committee showcased the need for nationwide crypto regulations, since Australia is falling behind many countries, while more than 800,000 Australians currently own some form of crypto assets.

The new regulations may become the biggest reform in Australia’s payment systems in 25 years, according to federal treasurer Josh Frydenberg.

The new regulatory framework will “broaden the definition of services and products that can be regulated,” successfully pushing cryptocurrencies and digital assets “out of the shadows” and into a “world-leading” regulatory framework, Frydenberg noted, adding that crypto companies will have to undergo a licensing procedure in order to bring end-user security to a higher level.

“Australia has an opportunity to be among the leading countries in the world in leveraging this new technology. Recent surveys have found that up to 17 percent of Australians currently own cryptocurrency, with that figure likely even higher among young Australians.” Frydenberg added.

The initial talks for the new regulatory framework would begin in early 2022, with crypto businesses and holders in Australia supporting the move.

For instance, BTC Markets CEO Caroline Bowler stressed that “it would be a crushing shame to not have our regulation keep pace with international peers such as Singapore, Canada, and Britain”.

Meanwhile, despite the Reserve Bank of Australia stating no strong case for a CBDC in Australia, such a pilot is already in development in order to stay competitive with other central banks. Frydenberg confirmed the news in an interview for a local media outlet.

According to the treasurer, a pilot launch date has not yet been pinpointed, but such a program can launch before 2022 ends.

Furthermore, Frydenberg noted that Australia is also setting its regulatory crosshairs on online transactions providers and the emerging buy-now-pay-later (BNPL) providers like Afterpay Ltd.

“If we do not reform the current framework, it will be Silicon Valley that determines the future of our payment system. Australia must retain its sovereignty over our payment system.” Frydenberg concluded.