The Australian government has decided to reject a bill that would have introduced new regulations for the cryptocurrency industry. The bill, which was proposed by the opposition Labor Party, aimed to create a legal framework for crypto assets and service providers, as well as to protect consumers and investors from fraud and scams.
The bill was based on the recommendations of a Senate inquiry into Australia’s future as a technology and financial centre, which was released in October 2022. The inquiry found that Australia was lagging behind other countries in terms of crypto innovation and adoption, and that a lack of regulation was creating uncertainty and risk for the industry.
The bill had several key features, such as:
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Defining crypto assets as digital representations of value that are secured by cryptography and can be transferred, stored or traded electronically.
Establishing a licensing regime for crypto service providers, such as exchanges, wallets, custodians and brokers, and requiring them to comply with anti-money laundering and counter-terrorism financing rules, consumer protection laws and data privacy regulations.
Creating a registration system for crypto asset issuers, such as initial coin offerings (ICOs) and security token offerings (STOs) and requiring them to disclose relevant information to investors and regulators.
Setting up a dispute resolution mechanism for crypto-related complaints and disputes between consumers, investors and service providers.
Empowering the Australian Securities and Investments Commission (ASIC) to oversee and enforce the crypto regulations and to issue guidelines and standards for the industry.
The bill was rejected by the ruling Liberal-National Coalition, which argued that the proposed regulations were too restrictive and would stifle innovation and competition in the crypto sector. The Coalition also claimed that the existing laws and agencies were sufficient to deal with the risks and challenges posed by crypto.
The government claimed that it was already working on a comprehensive approach to crypto regulation, in consultation with relevant stakeholders and regulators. The government also said that it was monitoring the global developments and best practices in crypto regulation, and that it would adopt a balanced and proportionate response that would support the growth of the sector while ensuring consumer protection and financial stability.
However, the Labor Party and some crypto experts disagreed with the Coalition’s stance, saying that the bill was necessary to provide clarity and certainty for the crypto industry, as well as to align Australia with international standards and best practices. They also warned that without proper regulation, Australia could lose its competitive edge and reputation as a crypto-friendly nation.
The rejection of the bill has sparked mixed reactions from the crypto community in Australia and abroad. Some welcomed the decision, saying that it showed the government’s support for innovation and freedom in the crypto space. Others criticized the decision, saying that it showed the government’s ignorance and indifference towards the crypto industry and its potential benefits for the economy and society.
The Labor Party said that the bill would have provided much-needed clarity and certainty for the industry, as well as enhanced consumer confidence and trust. They also said that the bill would have aligned Australia with other jurisdictions that have already implemented or are developing crypto regulation, such as the UK, Singapore, Japan, Canada, and the US.