Australia’s digital asset industry has hit a roadblock as the Senate Economics Legislation Committee recommended against passing of the Digital Assets (Market Regulation) Bill. The crypto bill, introduced by Liberal Senator Andrew Bragg, aimed to establish a licensing framework for cryptocurrencies and central bank digital currencies (CBDCs). While the committee supports further regulation for the industry, it raised concerns about the bill’s lack of detail and alignment with international regulatory standards. This development will likely slow down the legislative process but aims to create a more robust framework for digital asset regulation in Australia.
Australia’s Regulatory Reform for Digital Assets
Australia is currently undergoing regulatory reform to address digital assets. Under the incumbent Labor government, a three-stage approach has been devised. The first stage involves strengthening the resources of the country’s securities regulator, ASIC, to enhance surveillance and registration. The subsequent stages will focus on reforming licensing and custody rules for digital asset service providers based on findings from the “Australia as a Technology and Financial Centre Senate select committee” led by Senator Andrew Bragg.
Concerns Raised by the Senate Economics Legislation Committee regarding the Crypto Bill
The Senate Economics Legislation Committee expressed several concerns regarding the Digital Assets (Market Regulation) Bill. One major concern is the crypto bill’s lack of alignment with international regulatory standards, a sentiment echoed by multiple inquiry participants. The committee also highlighted the bill’s inadequate integration with existing financial regulatory frameworks, which could potentially lead to regulatory arbitrage and undermine the digital asset industry in Australia.
Detailed and Certain Legislation Required
The committee emphasized that the crypto bill fails to provide the necessary detail and certainty for investors, consumers, and industry stakeholders. While acknowledging the Australian Government’s recent initiatives to consult with industry stakeholders, the committee believes that more suitable legislation should be crafted through continued consultations.
Stalling Legislative Progress
Although the Senate Economics Legislation Committee’s recommendations have stalled further legislative progress, they serve as a crucial step in creating a stable and robust regulatory framework for digital assets in Australia. The committee encourages the government to continue engaging with industry stakeholders to develop more effective legislation.
