Australia said Monday it will conduct a virtual inventory of the country’s cryptocurrency assets, the first signal from the new center-left government that it plans to regulate the $1 trillion cryptocurrency sector.
On August 22, the Treasurer Jim Chalmers released a statement in which he said that Australia’s government, led by Prime Minister Anthony Albanese since May 23, would begin a review of cryptocurrency asset management in order to keep practices up to date and protect consumers.
He said, “Australians are experiencing a digital revolution across all sectors of the economy, but regulation is struggling to keep pace and adapt with the crypto asset sector.”
“As the first step in a reform agenda, Treasury will prioritize ‘token mapping’ work in 2022, which will help identify how crypto assets and related services should be regulated. This hasn’t been done anywhere else in the world, so it will make Australia leaders in this work.”
According to the Sydney Morning Herald, token mapping involves disclosing the characteristics of all digital asset tokens in Australia, including displaying the cryptocurrency type, its underlying code and any other defining technological function. The department will catalog the types and uses of digital tokens owned by its citizens as a first step in determining which cryptocurrency assets should be regulated and how. Australia will become the world’s first country to conduct such review.
“As it stands, the crypto sector is largely unregulated, and we need to do some work to get the balance right so we can embrace new and innovative technologies while safeguarding consumers,” Chalmers added.
“With the increasingly widespread proliferation of crypto assets – to the extent that crypto advertisements can be seen plastered all over big sporting events – we need to make sure customers engaging with crypto are adequately informed and protected,” the statement said.
Chalmers commented that the government would publish a consultation paper with the sector on the regulatory framework before completing the “token mapping.”
“The great Web3 companies of tomorrow need the flexibility to be able to innovate today,” added Holger Arians, the CEO of Banxa, an Australia fiat to crypto exchange, told CoinDesk, speaking about the quick development of the space, and the need of the regulation to adjust.
“While we believe the token mapping exercise is a step in the right direction, we hope to see ongoing close collaboration with our industry so that the appropriate regulatory frameworks can be put in place,” he said.
The proposal to introduce token mapping seems to be a political issue, as it came three months after the defeat of the previous Labor administration under Scott Morrison. Chalmer commented that the “previous government dabbled in crypto asset regulation but prematurely jumped straight to options without first understanding what was being regulated.”
“The Albanese government is taking a more serious approach to work out what is in the ecosystem and what risks need to be looked at first,” he said.
Chalmers also added that “the aim will be to identify notable gaps in the regulatory framework, progress work on a licensing framework, review innovative organisational structures, look at custody obligations for third-party custodians of crypto assets and provide additional consumer safeguards.”