Australia has vowed to improve its crypto-assets regulatory system through “token mapping” to provide greater customer protections and stay ahead of the digital evolution curve.
Unveiling the plan on Monday, the country’s treasury noted that despite the number of taxpayers interacting with Bitcoin, Dogecoin and other crypto assets skyrocketing since 2018, regulations in the sector were still struggling to keep up the pace hence the need to give the industry a top priority.
“As it stands, the crypto sector is largely unregulated, and we need to do some work to get the balance right so we can embrace new and innovative technologies while safeguarding consumers,” read a statement by Jim Chalmers, Australia’s Treasurer.
According to the statement, the Treasury will prioritise ‘token mapping’ in 2022 to help it “identify notable gaps in the regulatory framework, progress work on a licensing framework, review innovative organisational structures, look at custody obligations for third party custodians of crypto assets and provide additional consumer safeguards.” This will supposedly make it the first country to conduct a comprehensive token mapping exercise globally, making it a leader in that work.
The latest announcement comes on the heels of a sharp decline in crypto prices over the past eleven months that saw the global crypto market capitalization slashed by over a half. However, despite the crypto winter escalating, crypto adoption in Australia has continued to surge, with the latest Banklesstimes report showing a 56% increase in crypto adoption between 2021 and 2022. According to Finder, 22% of the Australian population currently holds crypto-assets, which is way above the global crypto ownership average of 15%.
Crypto adoption in the country is being fired up by key, among other reasons, inflation and advertisements. While this growth is remarkable, the crypto sector has been awash with crimes and nefarious players hence the need to come up with sweeping regulations to protect consumers and uphold the sector’s integrity.
Australia has made several attempts at regulating the crypto sector, with the previous treasury boss, Josh Frydenberg, pledging to take the crypto sector “out of the shadows” by bringing it into a regulatory framework. These attempts have, however, been thwarted by the election of a new government and treasury heads.
The current Anthony Albanese-led government has promised to take a more serious approach in mapping out regulations for the crypto sector by first seeking to understand what is in the ecosystem and what risks need to be looked at. The treasury also promised to release a public consultation on “token mapping” soon, with those finding potentially being used to draw up legislation.