The Australian government has said it will take steps to ensure that “regulation of crypto assets protects consumers” and one of those steps will be reform of the “licensing and custody of crypto assets”. The Anthony Norman Albanese-led government also said it has released a consultation paper that explores “which elements of the crypto ecosystem are sufficiently regulated and which need further attention.”
Putting consumer protection first
The Australian government said it was working to “ensure that regulation of crypto assets protects consumers” as well as position the economy “to take advantage of new digital products and services.”
To achieve these goals, the Australian government said it plans to “reform the licensing and custody of crypto assets.” Particular attention will be given to a subset of cryptocurrencies “that currently fall outside the financial services regulatory framework,” the government said.
In a statement released on February 3, the Anthony Norman Albanese-led government said it also intended to subject crypto-asset service providers to what it calls “a set of operational requirements and standards.” The statement adds that these standards are intended to protect customers’ digital funds.
Regarding the design of a custody and licensing framework, the Australian government said it would begin a public consultation process in “mid-2023 to allow for sufficient consultation before legislation is introduced”.
Identify and control emerging risks
Also in the statement, Prime Minister Albanese’s government said that while it has taken immediate action to protect consumers, much more needs to be done. The government added:
A consultation paper released today explores in detail which parts of the crypto ecosystem are sufficiently regulated and which need further attention. This will allow government and stakeholders to focus on regulatory gaps and ensure emerging risks are identified and controlled.
The statement also said that while the Australian government is open to working with stakeholders, it nevertheless wants this to be done in an orderly manner. This allows the government to “put in place the right policy settings to protect consumers and support innovation in this emerging sector”.
In addition to the planned crypto custody and licensing framework, the Australian government said it has already taken steps to ensure consumer protection. Some of these milestones include increasing the size of the Australian Securities & Investments Commission (ASIC) crypto team. Stopping scams as well as detecting possible money laundering or terrorist financing are also listed as other measures already taken.
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