The Australian crypto industry is urging the newly reelected Labor government to prioritize digital asset legislation to ensure that Australia keeps pace with global markets. With a strong mandate following the election on May 3, where the Labor Party secured 54.9% of the two-party-preferred vote, the industry experts emphasize the necessity for rapid action on crypto law reform.
During the election, both the Labor and opposition parties committed to addressing crypto regulation; however, only the opposition pledged to deliver draft legislation within the first 100 days. According to Joy Lam, Binance’s head of global regulatory and APAC legal, discussions about crypto legislation have been ongoing, and the time for action is now. “Timing is really quite critical now because obviously it’s something that has been discussed and kicked around for quite a few years,” she noted in an interview with Cointelegraph.
John O’Loghlen, managing director for APAC at Coinbase, echoed similar sentiments, calling for the establishment of a Crypto-Asset Taskforce to expedite the regulatory process. He highlighted the government’s responsibility to act quickly on these matters, aiming to create a framework that protects consumers, promotes innovation, and retains talent and capital within Australia.
Caroline Bowler, CEO of BTC Markets, remarked that the election result offers a potential for significant advancements in Australia’s approach to digital asset regulation. Industry leaders have expressed relief that the Australian government seems to be refining its stance towards a more favorable regulatory environment.
In light of global developments, Lam pointed out that the UK recently released its draft regulations, while stablecoin initiatives are advancing in the US, and the EU has already implemented its MiCA legislation. “So there’s a very clear shift. Everyone’s moving towards providing the regulatory framework needed for the industry to develop sustainably. Time is really of the essence now,” she stated.
Looking Ahead: Draft Legislation on the Horizon
The Treasury’s office shared that exposure draft legislation is due later this year for public consultation, with plans for reforms to be phased in to avoid disruptions for existing businesses. Current draft legislation and regulatory modernization are expected to be released by the end of June.
Despite hopes, questions regarding the timeline remain. Lam expressed uncertainty regarding whether the proposed schedule will be met. While the Labor government has faced scrutiny for not having acted in its first term, some analysts believe this could ultimately lead to better frameworks than those inspired by the more stringent approach seen in the US.
Industry professionals report marked changes in the government’s crypto regulatory approach since the initial proposals of late 2023, with a newfound positivity in recent Treasury communications. The government seeks to implement a regulation that will utilize the existing Australian Financial Services License regime for digital asset platforms, aiming to enhance the safeguarding of client assets.
Furthermore, the government plans to review the Enhanced Regulatory Sandbox, fostering a space for innovative digital startups, and explore tokenization opportunities. This shift indicates attentiveness to industry feedback and a responsive approach to evolving global standards.
As the government continues to explore its regulatory options, Markovy from Fireblocks pointed out that substantial groundwork has already been completed. “What is significant here is the willingness of the Government to cut through the complexity and uncertainty surrounding crypto intermediaries licensing.” It is crucial for regulators to establish a clean licensing framework, significantly alleviating bank-related concerns.
In conclusion, the Australian crypto industry stands poised for change, with hopeful anticipation of progressive reforms that will not only solidify Australia’s standing in the global crypto landscape but also protect and empower its digital asset community. The coming months will be critical for stakeholders as the government works to strike a balance between regulation and innovation in this rapidly evolving space.
