A new bill has been introduced to the Australian Parliament proposing regulations for the provision of cryptocurrency services in the country.
Senator Andrew Bragg has introduced a private senatorial bill called the Digital Assets (Markets Regulation) Bill 2023 to "protect consumers and facilitate investors," which includes requirements for stablecoins, exchange licensing and custody regulatory recommendations. Proposed regulatory changes are usually proposed by Australian ministers. However, as stipulated by the Parliamentary Education Office, MPs can introduce private MPs or private senators' bills, which can take months or years to pass through Parliament.
Bragg provided more information on the submission of the private bill, slamming the current Labor government for failing to follow through on 12 recommendations from a Senate select committee in October 2021 related to the regulation of cryptocurrencies, Australia as a technology and financial hub. The senator also added that Australian consumers have been exposed to industry-wide events such as the FTX debacle due to the Australian government’s failure to act to provide regulatory transparency to the industry.
"Australia can be a digital asset hub while protecting digital asset consumers. But we must act now." The bill aims to provide a regulatory framework for cryptocurrency exchanges, custody services and stablecoin issuers that both protects consumers and promotes investment.
It also hopes to provide guidance for reporting information by authorized depository institutions to issue and control central bank digital currencies. If passed, the bill would require individuals or businesses to hold a license from the Australian Securities and Investments Commission or a foreign license to operate a cryptocurrency exchange. This also applies to cryptocurrency custody services and stablecoin issuers in Australia.
The bill also sets out various obligations and requirements for exchanges, custody services, and stablecoin issuers. These range from capital or minimum reserve requirements, segregation of client funds, reporting of client holdings, audit, assurance and disclosure arrangements.
Australia is currently conducting a public consultation on the classification of cryptocurrencies and various digital asset tokens, services and platforms. The “Token Swap” consultation paper, published in February, outlines a basic definition of the cryptocurrency space.
