Crypto regulation has been receiving growing interest in different jurisdictions recently. While some countries maintain rigid digital assets control, some outrightly banned their usage.
Currently, crypto regulation in Australia is passing through heated arguments. Some of the country’s top government officials want to classify crypto as financial products, while some crypto executives refute it.
Minister Deems Regulating Crypto As Financial Products An Argument, Why?
One Australian media, The Sydney Morning Herald (SMH), reported about the country’s take on crypto regulation. According to SMH, Stephen Jones, the Australian Assistant Treasurer and Minister for Financial Service spoke on the matter on January 22, 2023.
In his speech, Minister Jones mentioned the government plans to roll out some laws regarding crypto regulations this year. In addition, he disclosed that the government intends to embark on a token mapping exercise highlighting all the crypto assets to regulate.
Further, Minister Jones mentioned the collapse of the FTX crypto exchange and its aftermath, stressing the need for crypto regulation. Hence, the government has set its eyes on some unregulated crypto assets, especially those acting as securities or financial products.
Jones noted that the aim is not to set up a different regulatory regime for crypto assets since they are classified as financial products. Therefore, to him, if crypto assets operate like financial products, they should be considered as such.
The minister argued that several tokens have served as speculative assets and investments. The report from SMH shows that other parties support the regulation of crypto assets as securities in the country. These include the Australian Securities and Investment Commission (ASIC) and Commonwealth Bank, a top Australian bank.
Crypto Executives Refute A Broad Approach Regulation For Digital Assets
Australian crypto executives and some market participants have stood against regulating crypto assets as securities.
Blockchain Australia, a crypto sector group, refuted the approach while speaking to Federal Treasury last year. It noted that treating crypto assets as financial products will negatively impact investments and innovations in the sector. Also, the move will result in a massive loss of jobs related to the crypto industry.
An Australian crypto entrepreneur, Fred Schebesta, reacted to the government’s plan for token mapping in September 2022. Schebesta, the co-founder of Finder, an Australian comparison website, noted that this process could have positive results. However, he reported that rushing the process could harm the country’s economy.
According to Schebesta, the Australian crypto industry is still underdeveloped and will need more support to grow. Hence, it must learn from other major markets and copy their regulatory approaches.
Also, crypto market participants argue against using a broad-stroke approach to crypto assets. According to Michael Bacina, a digital asset lawyer and partner at Piper Alderman, such a broad classification will send many crypto-related businesses offshore and create more risks in the country.