Crypto regulation has recently attracted increasing interest in different jurisdictions. While some countries maintain rigid control over digital assets, some have banned their use outright.
Currently, crypto regulation in Australia is going through heated arguments. Some of the top government officials in the country want to classify crypto as financial products, while some crypto executives refute it.
The minister sees the regulation of crypto as financial products as an argument, why?
An Australian media, The Sydney Morning Herald (SMH), reported on the country’s stance on crypto regulation. According to SMH, Stephen Jones, Australia’s Deputy Treasurer and Minister for Financial Services spoke on the matter on January 22, 2023.
In his speech, Minister Jones mentioned that the government is planning to roll out some laws regarding crypto regulation this year. Furthermore, he disclosed that the government intends to embark on a token mapping exercise highlighting all crypto assets to be regulated.
Additionally, Minister Jones mentioned the collapse of the FTX crypto exchange and its aftermath, emphasizing the need for crypto regulation. Therefore, the government has set its sights on certain unregulated crypto assets, especially those that act as securities or financial products.
Jones noted that the goal is not to set up a different regulatory regime for crypto assets since they are classified as financial products. Therefore, for him, if crypto assets function as financial products, they should be considered as such.
The minister argued that several tokens served as speculative assets and investments. The SMH report shows that other parties support the regulation of crypto assets as securities in the country. These include the Australian Securities and Investment Commission (ASIC) and Commonwealth Bank, a major Australian bank.
Crypto execs refute broad approach regulation for digital assets
Australian crypto executives and some market participants have opposed the regulation of crypto assets as securities.
Blockchain Australia, a crypto industry group, refuted the approach during an interview with the Federal Treasury last year. He noted that treating crypto assets as financial products will negatively impact investments and innovations in the sector. Also, this move will lead to a massive loss of jobs related to the crypto industry.
An Australian crypto entrepreneur, Fred Schebesta, reacted to the government’s plan for token mapping in September 2022. Schebesta, the co-founder of Finder, an Australian comparison website, noted that this process could have positive results. However, he said rushing the process could hurt the country’s economy.
According to Schebesta, the Australian crypto industry is still underdeveloped and will need more support to grow. Therefore, it must learn from other major markets and copy their regulatory approaches.
Additionally, crypto market participants oppose the use of a holistic approach to crypto assets. According to Michael Bacina, a digital asset lawyer and partner at Piper Alderman, such a broad classification will send many crypto-related businesses overseas and create more risk in the country.
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