Australia's new government, led by Prime Minister Anthony Albanese since May 23, will begin a review of how cryptocurrency assets are managed, with a view toward keeping practices up to date and protecting consumers, Australian Treasurer Jim Chalmers said in a statement released on Monday.
"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," Chalmers said in the statement.
"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."
Token mapping involves uncovering the characteristics of all digital asset tokens in Australia including charting the type of crypto asset, its underlying code, and any other defining technological feature, according to the Sydney Morning Herald.
“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 said.
“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 said that before "token mapping" is completed, the government will release a consultation paper with the sector about a regulatory framework.
“The great Web3 companies of tomorrow need the flexibility to be able to innovate today,” Holger Arians, CEO of Banxa, an Australia-based fiat to crypto exchange, told CoinDesk in a text message, reflecting concerns that since the space is evolving quickly, regulation will need 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 wrote.
The move appears to have become a political issue since it comes three months after Albanese’s government defeated the previous labor administration under Scott Morrison. Chalmer said 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,” Chalmers said.
Chalmers specified 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," according to the statement.
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