Australia Does Not Consider Cryptocurrency to be Financial Products
2023.01.23 03:18
Australia Does Not Consider Cryptocurrency to be Financial Products
By Ray Johnson
Budrigannews.com – Following recent remarks made by Australia’s assistant treasurer and minister for financial services about the state of crypto regulation in the country, Australian crypto executives have urged caution against lumping all digital assets in the same boat as financial products. Assistant Treasurer and Minister for Financial Services Stephen Jones made the remarks to the Sydney Morning Herald on January 22.
According to a crypto exchange executive, he confirmed that the government was on track with its “token mapping” exercise this year to determine which crypto assets to regulate and that a consultation process with the industry “will begin soon.”
However, Jones stated that he was “not that attracted” to establishing entirely new regulations for something that, in his opinion, is fundamentally a financial product.
Minister for Financial Services and assistant treasurer for Stephen Jones, an MP. Source: “I don’t want to pre-judge the outcomes of the consultation process we are about to embark on,” reads the Australian Labor Party website. However, Jones stated, “I start from the position that it should be treated like a duck if it looks like a duck, walks like a duck, and sounds like a duck.”
“Other coins or tokens are primarily being utilized as a value store for investment and speculation. They ought to be treated like a financial product, according to a convincing argument.
SMH reports that the Australian Securities and Investments Commission (ASIC) and Commonwealth Bank, one of Australia’s “Big 4” banks, are also in favor of regulating cryptocurrency as a financial product.
However, participants in the cryptocurrency market have cautioned against taking a blanket approach to crypto assets.
“A broad approach of classifying a technology as a financial product without a clear and usable pathway to licensing and compliance will likely send even more crypto businesses offshore and create more risk,” said blockchain and digital asset lawyer and Partner at Piper Alderman Michael Bacina, in an interview.
In statements, Swyftx General Counsel Adam Percy echoed the sentiment.
“The trick is to protect consumers without regulating well-run domestic digital asset businesses or forcing people to use off-shore exchanges with fewer controls.”
In the meantime, Holger Arians, CEO of crypto on-ramp provider Banxa, expressed concern that excessive regulation could “seriously impact” Australia’s pioneering role in crypto.
An “overly prescriptive approach” to regulation was also cautioned against by Caroline Bowler, CEO of the Australian cryptocurrency exchange BTCMarkets.
“This may eventually put our digital economy on the back foot, reducing our international competitiveness.”
Despite the fact that the regulatory framework for Australian financial regulators has not yet been officially formulated, politicians in Australia and around the world have felt a greater need to take action in light of the FTX meltdown in November.
The FTX collapse, according to Jones, “puts beyond doubt” the necessity of crypto regulation.
Fred Schebesta, an Australian crypto entrepreneur and investor, issued a warning in September that rushing the token mapping process could be detrimental to the sector.
He added that Australia’s “fledgling” cryptocurrency industry must “align with the other major markets and their regulations” due to the complexity of token mapping.
Blockchain Australia, a lobby group for cryptocurrencies, agreed, arguing at the time that treating all cryptocurrencies as financial products would hurt investment and innovation in the cryptocurrencies sector and lead to the loss of jobs related to the industry.
