The Australian government announced plans to token map all digital assets in its crypto asset sector as it intensifies efforts to protect consumers against unregulated market conditions.
Australia’s tax office estimates that more than one million people have interacted with crypto assets in the region since 2018. As a result, the government is seeking to improve the regulatory system so as to offer more protection to customers and investors.
Treasurer Jim Chalmer who is spearheading the regulation said:
“With the increasingly widespread proliferation of crypto assets, we need to make sure customers engaging with crypto are adequately informed and protected.”
Token mapping all crypto assets
The token mapping process regulators will classify tokens based on their asset types, underlying code, and other defining technological features.
With clearly defined asset classes, the government can regulate the industry based on existing laws and enact new laws where a particular asset class requires specialized legislation.
Jim Chalmer also noted that the process will enable the government to work on licensing frameworks, consider custody obligations for exchanges and provide additional consumer safeguards.
Is the government trying to buy time?
Australian Lawyer Aaron Lane claimed that the “token mapping” exercise is a strategy by the government to buy time. He argues that consumers in the region need urgent regulatory protections as bad actors are taking advantage of the loose environment to exploit consumers.
The first official comments about what the Albanese government is doing on #crypto regulation – token mapping to buy time on a restarting the Treasury discussion paper process launched earlier this year. https://t.co/rjE4JAfctr
— Aaron Lane (@AMLane_au) August 21, 2022
Crypto Regulation in the Australian Market
The rising cases of crypto exchange collapse and scam attacks led the Australian consumer advocacy group (Choice) to motion the government about accelerating its crypto regulation process.
The government through Australia’s Prudential Regulation Authority (APRA) detailed its plan to regulate the crypto market fully by 2025. It expects to continue its consultation and drafting of frameworks until 2023, and then introduce clear regulatory standards in 2024 and 2025.
The Australian Central Bank governor, Philip Lowe has, however, asserted that if cryptocurrencies are properly regulated, they could be better than central bank digital currencies (CBDCs). Lowe stated:
“I tend to think that the private solution is going to be better – if we can get the regulatory arrangements right.”