Australia Introduces Full control over crypto markets
2023.02.03 09:40
Australia Introduces Full control over crypto markets
By Tiffany Smith
Budrigannews.com – Australia opened a public consultation on its own taxonomy of crypto assets following the global regulatory race. The national regulators propose classifying crypto-related products into four broad categories.
The Australian Treasury announced the release of a consultation paper titled “Token Mapping” on February 3 as the first step in the Government’s multi-stage reform plan to regulate the market. It aims to guide “a fact-based, consumer-conscious, and innovation-friendly” policymaking approach.
The paper offers a number of fundamental definitions for all things crypto, all of which are based on the “functional” and technology-neutral approach.
It explains the fundamentals of crypto networks, crypto tokens, and smart contracts at the first level. A distributed computer system that is capable of hosting crypto tokens is referred to as a crypto network, in accordance with the Treasury’s vision. Its primary function is to process user instructions and store information. The two most well-known public cryptocurrency networks mentioned in the paper are Bitcoin and Ethereum.
A crypto token is a piece of digital data that can be “exclusively used or controlled” by someone who doesn’t manage the hardware on which it is stored. The paper says that the idea of “exclusive use and control” is one of the main things that sets crypto tokens apart from other digital records.
A smart contract is code that is uploaded to the database of a crypto network. It involves promises being fulfilled by agents or intermediaries or other arrangements or procedures being carried out by crypto networks without promises, agents, or intermediaries.
The paper proposes four taxonomies for crypto-related products based on these straightforward definitions:
- Services based on crypto assets include lending and borrowing, trading crypto tokens, managing funds, mining and staking as a service, gambling, and custody.
- Intermediated crypto assets, which are the closest thing to a widely accepted definition of tokens; rights or licenses pertaining to event access or subscriptions, intellectual property, reward programs, consumer goods and services, fiat money, non-financial assets, and coupon codes for government bonds Stablecoins fall under this category.
- Network tokens are a “new type of currency” that make up the infrastructure for peer-to-peer payments. Consider your first Bitcoin (BTC).
- There are a variety of smart contracts, ranging from “intermediated” to “public.” The former is used by intermediaries to provide services; The parties utilize the latter to eliminate the requirement for an intermediary.
The authors anticipate a relatively simple adaptation of existing laws for a significant portion of the crypto ecosystem, despite the fact that the paper makes no legislative recommendations and only proposes to begin the discussion on this taxonomy. The areas of the ecosystem where functions are being maintained by public, self-service software may necessitate the development of a new legal framework.
Up until March 3, the Treasury will wait for feedback. A similar paper on the potential licensing and custody framework for cryptocurrency will be released in the middle of 2023, marking the next significant step in a national regulatory discussion.
The consultation paper for the crypto regulation was also published on February 1 by His Majesty’s Treasury of the United Kingdom. Given that the Financial Services and Markets Act already covers digital assets, the financial authority emphasized in it that separate legislation was unnecessary.
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