Senator Andrew Bragg, the author of the Digital Assets (Market Regulation) Bill, has issued a warning that Australian investors will face an unregulated market and could potentially drive investments out of the country if the bill is rejected by Parliament.
On September 4, the Senate Economic Legislation Committee recommended that the Senate reject Bragg's bill and instead advised the government to continue consultations with the industry to develop cryptocurrency regulations.
The committee's rationale for opposing the bill was that it "fails to interoperate with the established regulatory environment, raising concerns about regulation," as stated by Labor Senator Jess Walsh, the committee's chair, in a report. She expressed real concerns about potential arbitrage adverse consequences for the industry.
In response, Senator Bragg criticized the committee's recommendations, contending that it would "expose consumers to an unregulated market and drive overseas investment away."
Bragg emphasized that the benefits of digital asset regulation are twofold: protecting consumers and promoting investment and market activity. He pointed out that the former Liberal government had put these regulations on the legislative agenda in October 2021.
He also suggested that the bill's rejection was largely due to partisan politics, as the Senate committee is chaired by a significant number of Labor members. He criticized their decision to oppose his draft bill, stating that it "impedes the implementation of Australia's digital assets reg "
Bragg firmly asserted that Australia would eventually have a regulated digital asset market. However, he expressed concern that as 2023 comes to a close, the government still lacks concrete plans to implement these regulations.
Liam Hennessey, a partner at the international law firm Clyde & Co., suggested that the rejection of the Prague bill might have more to do with separate regulatory processes, particularly the Treasury Department's inquiry into the government's "Consultation Paper for the Token Swap event. " Hennessey stated that the potential rejection of the Prague bill would neither be good nor bad for cryptocurrency regulation in Australia.
He further explained that the Prague bill and the industry feedback it has received will likely be taken into consideration, but the Senate is currently occupied with broader legislative matters, so any delay should not be over-interpreted.
Hennessey concluded by emphasizing the value of Senator Prague's bill and the work done in shaping cryptocurrency regulation in Australia. He believes that it will significantly guide the government's approach to regulation.
