Australia is taking steps to regulate the digital currency space with a proposal from Treasurer Jim Chalmers to bring cryptocurrency exchanges and digital asset platforms under existing Australian financial services laws. The government’s plan also includes requiring platform operators to obtain an Australian financial services license, with coverage extended to platforms holding over $1,500 of an individual’s assets or $5 million in total. Additionally, minimum standards for digital assets like tokens are under review.
Approximately a quarter of Australians are cryptocurrency owners, and online platforms hold significant sums in digital assets, presenting potential risks. The proposal aims to enhance oversight and operational standards to mitigate the risk of platform collapses that could result in asset losses or delays for creditors.
Jim Chalmers emphasized the government’s commitment to protect consumers and foster innovation, stating they are taking decisive and methodical steps in this direction. Feedback on the proposal is open for comments until December 1, and consultation on draft legislation will continue into the following year.
Separately, Brad Jones, an assistant governor of the Reserve Bank of Australia (RBA), discussed the central bank’s evolving perspective on a “tokenized future,” including digital currencies for the country. The RBA remains open to various forms of digital money and supporting infrastructure that can best serve the Australian economy in the future. The bank is in the early stages of planning a project to assess how tokenized asset markets might trade in Australia. The RBA and Treasury will publish a “stocktake” on their research into a central bank digital currency by mid-2024 and lay out a roadmap for future work.
Brad Jones noted the potential for billions of dollars in annual savings through the use of digital currencies, offering instant information and accountability. For instance, he mentioned the $750 billion market for bank term deposits, which is still managed using traditional methods. However, he also pointed out challenges such as regulatory uncertainty and compliance obligations, particularly in cases where smart contracts on programmable ledgers encounter issues. Policymakers and industry collaboration will be necessary to address these challenges effectively.
