Crypto legislation in Australia could be dragged out past 2024 and beyond, with the government seemingly wanting to take its time in order to get a full picture of the industry, internal documents from the government have revealed.
The documents, obtained by The Australian Financial Review under freedom of information laws, reportedly reveal that the government aims to release consultation papers in the second quarter of 2023 and will hold stakeholder roundtables on crypto licensing and custody in the third quarter.
The industry has been waiting to see the next steps of the Australian Labor government’s token mapping exercise, which was announced three months after it came into power last year, with submissions closed on March 3.
Consultation open! Today we released the token mapping consultation paper. This consultation is part of a multi step reform agenda to develop an appropriate regulatory setting for the #crypto sector. Read paper & submit views @ https://t.co/4W2msjhP9B @ASIC_Connect @AUSTRAC pic.twitter.com/OGHuZEGvDp— Australian Treasury (@Treasury_AU) February 2, 2023
However, according to the documents, final submissions to the cabinet are not expected until late in the year, possibly dragging out any decisions on crypto legislation well into 2024 and beyond.
One briefing from the department has also reportedly acknowledged that they expect frustration from crypto businesses and consumer groups over the long timetable.
“Treasury expects some stakeholders to be disappointed with the perceived delay in implementing a licensing regime,” according to a brief from Australian Treasurer Jim Chalmers, seen by AFR.
“For example, consumer groups seeking immediate protections and businesses seeking regulatory legitimacy.”
However, the Treasury believes that in the wake of FTX’s collapse, the demand for cryptocurrencies has “weakened significantly,” which could give it more time to hash out 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."
Meanwhile, the government has also revealed through the documents that it has created a dedicated “crypto policy unit” within the Treasury department.
In a meeting with treasury last November, the crypto policy unit reportedly flagged possible requirements for crypto licenses, including “fit and proper person” tests, capital requirements and obligations to report bad actors and scams in the industry. The unit also discussed beefing up consumer protections.
Last year, a survey from Australian crypto exchange Swyftx revealed in September that approximately one million Australians planned to purchase cryptocurrency for the first time over the next 12 months, bringing total crypto ownership in the country to over five million.