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Platforms that hold over $1,500 of an individuals assets or $5m in aggregate will be subject to existing Australian financial services laws

Australian Associated Press

Sun 15 Oct 2023 20.09 EDT

Australias crypto crackdown is starting to take shape with the government revealing the next steps in its bid to regulate the digital currency.

The treasurer, Jim Chalmers, unveiled his proposal to make crypto exchanges and digital asset platforms subject to existing Australian financial services laws.

The government is also proposing to make platform operators obtain an Australian financial services licence.

Platforms that hold over $1,500 of an individuals assets or $5m in aggregate will be covered by the changes.

Minimum standards for digital assets such as tokens are also being reviewed.

About a quarter of Australians own some sort of crypto.

Online platforms hold billions of dollars in assets and expose Australians to significant risks, the proposal paper says.

Collapses of digital asset platforms, both locally and globally, have seen Australians lose their assets or be forced to wait their turn amongst long lines of creditors, it says.

These reforms seek to reduce the risk of these collapses happening, by lifting the standard of their operations and increasing their oversight.

Chalmers said the government was moving decisively and methodically to ensure that consumers are adequately protected and innovation can flourish.

Feedback on the proposal paper closes 1 December and consultation for draft legislation will continue next year.

Separately, Brad Jones, an assistant governor of the Reserve Bank has outlined the central banks evolving views of a tokenised future including digital currencies for Australia.

Jones said the RBA remains open-minded as to the functional forms of digital money and supporting infrastructure that could best support the Australian economy in the future.

The bank, though, is only at the early stages of planning for a new project to assess how tokenised asset markets might trade in Australia. The RBA and Treasury will also publish a stocktake on their research into a central bank digital currency by around the middle of 2024 and then set out a roadmap for future work.

Jones said there is potentially billions of dollars a year in savings in terms of the instant information and accountability of at least some forms of digital currency.

He said cited the example of pricing in the $750bn market for bank term deposits or about 15% of Australian bank funding was still largely conducted over the phone, in branches, by email, and on spreadsheets, much like 25 years ago.

Is this the best we can do? Jones asked.

However, challenges include ongoing regulatory uncertainty and compliance obligations. [If] a smart contract on a programmable ledger goes awry, cross-border and anti-money laundering responsibilities do not disappear, but who is accountable? Jones said.

[W]e should be wide-eyed to these challenges, he said. Its very possible they can be overcome, but more work by policymakers and industry is needed.

See the original post here:
Treasurer unveils cryptocurrency reforms to protect Australians who own digital assets - The Guardian