The Australian government has introduced a new consultation document with the objective of regulating crypto exchanges to mitigate risks for consumers.
“The proposed regulatory framework would apply to digital asset service providers that present similar risks to entities that operate in the traditional financial system,” the paper stated.
Australian Government Pursues Flexibility in Crypto Regulations
The consultation paper indicates that the Australian government plans to leverage the existing regulations for traditional financial institutions. These will act as a guide for regulating crypto activities in the country.
“It seeks to leverage the Australian Financial Services Licence (AFSL) framework to regulate digital asset service providers to ensure consistent oversight and safeguards for consumers.”
However, it cites the fast-pace changing nature of the crypto industry. It states that “the implementation of the proposed framework is subject to future legislative design and development.”
“References to amending existing legal frameworks are demonstrative of policy intention. The focus of this paper is to seek feedback on the policy of the framework.”
The proposed framework aims to achieve several objectives, including safeguarding consumer interests and fostering innovation. It also highlights bringing Australia’s digital asset framework in line with global standards.
The consultation places significant emphasis on establishing a fair and equitable landscape for both traditional financial institutions and digital asset finance organizations. This is in response to global recognition of this as a key priority.
Protecting Crypto Consumers A Main Focus For Australian Government
However, it points out that numerous digital assets do not fall under the category of financial products. To elaborate, digital assets used in activities such as video gaming, gambling, and the metaverse are cited.
It suggests that further clarification could be achieved by amending the Corporations Act 2001. This would introduce a new financial product category to regulate these specific activities.
On April 5, BeInCrypto reported that Australian Senator Andrew Bragg introduced a draft bill in the country with the aim of protecting consumers and promoting investors.
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