Australia is losing the global race when it comes to regulating digital assets, according to Liberal Senator Andrew Bragg, who this week introduced a new bill into parliament which would establish a licensing regime for cryptocurrency exchanges.
Senator Bragg previously chaired the Senate select committee on Australia as a technology and financial centre, which delivered 12 recommendations relating to the regulation of crypto back in October 2021 with the goal of making Australia a leading jurisdiction for digital assets.
The former government had agreed in principle to 11 of these recommendations and Treasury also began public consultations on custody and licensing requirements in March last year.
However, Senator Bragg claimed that the Labor party had “barely shown any interest at all in digital assets” since coming to power last year and had “started the consultation all over again” with its token mapping project.
“Australia is in the midst of a race for consumer protection, capital attraction, and innovation. The Albanese government has commissioned another review rather than responding to the Treasury consultation on crypto markets and custody,” he told parliament on Wednesday.
“By commissioning more departmental reviews, the government is trying to create the impression that it is doing something when it is not. The government should get on with the job of producing draft legislation rather than commissioning more reviews.”
According to Senator Bragg, the collapse of the FTX exchange in November last year has demonstrated that measures in the crypto space are urgently needed. He warned that waiting was not an option and that Australian consumers are being exposed to an unregulated market.
The Digital Assets (Market Regulation) Bill 2023 introduced by the senator includes a new licensing regime which would be divided into three licence authorisations relating to exchanges, custody requirements, and the issuance of stablecoins.
“The rationale for this licensing structure is twofold. Firstly, by providing a rules and standards based regime, we give confidence to the consumer that risk exposure is managed, and on par with other financial services and products,” Senator Bragg explained.
“Secondly, by providing regulatory certainty, this regime opens the door to greater investment and growth in Australia’s crypto ecosystem and virtual economy, in a way that allows the industry to evolve and innovate without short-sighted constraint.”
The Senator had previously released a draft bill for consultation last September which included new rules for digital asset exchanges, digital asset custody services, stablecoin issuers, and disclosure requirements for facilitators of the e-yuan in Australia.
Speaking in parliament on Wednesday, Senator Bragg said that he had engaged in extensive consultation on what a regulatory framework for digital assets should look like and suggested that his bill had the dual purpose of consumer protection and innovation in mind.
He also specifically called out Stephen Jones and claimed that the Minister for Financial Services and the federal government were failing consumers.
“After 10 months in the job, the Minister for Financial Services, Stephen Jones should be prepared to make a decision which doesn’t relate to his favourite vested interests. He should release a draft bill now,” said Senator Bragg.
“The draft bill should show how Australian consumers could be protected with capital requirements, key personnel tests, auditing, and disclosure. Jones and Labor are failing Australian consumers. Future failures will be on their heads.”
