Crypto regulation in Australia could be postponed until beyond 2024, according to internal government documents that have been accessed by The Australian Financial Review.
The records, obtained via freedom of information laws, show that the government is planning to put out consultation papers in the second quarter of 2023 and will hold stakeholder roundtables about crypto licensing and custody in the third quarter.
The industry has been anticipating the next steps of the Australian Labor government’s token mapping initiative, which was announced a few months after the party came into power in 2020, with the submissions for the project ending on 3 March.
Still, the documents indicate that the final submissions to the federal cabinet are scheduled to be made at the end of the year, which could result in the crypto legislation being delayed well into 2024 and further.
One briefing from the department has also recognized that the long timeline might be met with disappointment from the crypto businesses and consumer groups.
“Treasury expects some stakeholders to be disappointed with the perceived delay in implementing a licensing regime,” as per a brief from Australian Treasurer Jim Chalmers, as seen by AFR.
“For example, consumer groups seeking immediate protections and businesses seeking regulatory legitimacy.”
Nonetheless, the Treasury believes that the market demand for cryptocurrencies has “weakened significantly” following FTX’s collapse, which could provide them with more time to figure out the regulations.
“Treasury considers these concerns are somewhat mitigated by the current market conditions resulting in less consumer demand for crypto assets; and the need to complete the token mapping exercise to provide clarity on how any new licensing framework would operate in practice.”
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Moreover, the records demonstrate that the government has set up a dedicated “crypto policy unit” within the Treasury department.
At a meeting with the Treasury last November, the crypto policy unit reportedly brought up potential requirements for crypto licenses, such as “fit and proper person” tests, capital requirements and obligations to report bad actors and scams in the industry. The unit also discussed increasing the consumer protections.
In 2020, a survey conducted by Australian crypto exchange Swyftx signaled that one million Australians were looking to buy cryptocurrencies for the first time in the next 12 months, bringing the total number of crypto owners in the country to over five million.
