Treasurer Jim Chalmers wants to make crypto exchanges and digital asset platforms subject to current Australian financial services laws
Australia’s crypto clampdown is taking shape with the government disclosing the next steps in its effort to regulate digital currencies.
Treasurer Jim Chalmers wants to make crypto exchanges and digital asset platforms subject to current Australian financial services laws.
The government is also proposing to make platform operators get an Australian financial services licence.
Platforms that hold more than $1500 of an individual’s assets or $5 million in aggregate will be covered by the changes.
Minimum standards for digital assets like tokens are also being reviewed.
Nearly one-fourth of Australians own some sort of crypto asset.
Online platforms hold billions of dollars in assets and expose Australians to significant risks, the proposal paper adds.
Collapses of digital asset platforms, both locally and globally, have seen Australians lose their assets or be compelled to wait their turn among long lines of creditors, the paper adds.
These reforms seek to lower the risk of these failures happening, by raising the standard of their operations and increasing their oversight, the paper says.
Dr Chalmers said the government was moving “decisively and methodically to ensure that consumers are adequately protected and innovation can flourish”.
The merits of a central bank digital currency are still under consideration in Australia, a top Reserve Bank official said at the Australian Financial Review’s crypto currency summit.
RBA assistant governor (financial system) Dr Brad Jones said the central bank remained “open-minded” to the idea of digital money and the supporting infrastructure.
The punchline here is that tokenisation offers some intriguing possibilities, but is not without its challenges and more work is required to understand how we could yield the benefits while managing the risk, Dr Jones said on Monday.
Several forms of tokenised money, which is money that has been converted into a digital token on a blockchain, were mentioned in his speech.
Dr Jones said unbacked crypto currencies such as Bitcoin that natively use blockchain technology were “more amenable to speculative investment than serving as a safe settlement instrument”.
Unbacked crypto currencies may remain a hotbed of speculative interest, but I struggle to envisage them playing an expansive role in the financial system of the future, Dr Jones added.
Of the various forms of tokenised money under consideration, he said only a wholesale central bank digital currency (CBDC) would be “completely free of credit and liquidity risk”.