Australia Unveils New Crypto Regulations Ahead of Upcoming Election

Australia's Labor government has unveiled a new set of rules aimed at regulating the crypto sector, bringing platforms like exchanges and custody services under existing financial regulations.

This proposal comes just as the nation is gearing up for a tight federal election, with the ruling Labor Party facing competition from the opposition Coalition.

The new framework, outlined by the Treasury Department on March 21, aims to apply similar compliance measures seen in traditional financial sectors. These include requirements for customer asset protection, securing an Australian Financial Services Licence, and maintaining minimum capital levels. However, smaller crypto platforms and non-financial digital asset firms will be exempt from the regulations.

Stablecoins, as part of the new rules, will fall under the Payments Licensing Reforms but will not be treated as traditional financial products in some cases, with certain stablecoins and wrapped tokens excluded from the regulatory scope.

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Along with these rules, Prime Minister Albanese’s government has pledged to address the issue of de-banking, which has become a challenge for many in the crypto industry. The government also plans to investigate the potential of a central bank digital currency, with a more flexible testing environment for new financial products expected in 2025.

As Australia awaits the election, there’s speculation that a change in leadership could impact the country’s approach to crypto regulation. Industry leaders like BTC Markets CEO Caroline Bowler and Kraken Australia’s Jonathon Miller have welcomed the framework but have called for clearer details on requirements for capital adequacy and custody to ensure Australia remains competitive in the global market.

Alexander Stefanov