Based on Treasury documents cited by media reports, a rounded crypto regulatory framework will not be implemented in Australia until after this year.
The Australian Financial Review revealed Treasury discussions with Treasurer Jim Chalmers on how to regulate crypto and the web3 sector.
Crypto Laws Still Far Off Despite Specialized ‘Policy Unit’
The report claims that the Treasury will consult local cryptocurrency businesses and draught new laws by next year. This is based on the Treasury’s timetable, which was made public under the Freedom of Information laws.
However, according to the documents, the Treasury now has a separate ‘crypto policy unit’ within the organization.
The Australian government started its efforts to regulate the cryptocurrency industry by tightening regulations in the last two years. In August 2022, the regime announced the launch of a token mapping exercise.
Treasurer Chalmers noted it would “keep up with developments and provide greater protections for consumers.”
“Treasury expects some stakeholders to be disappointed with the perceived delay in implementing a licensing regime,” per the memo addressed to Treasurer Chalmers. “For example, consumer groups seeking immediate protections and businesses seeking regulatory legitimacy.”
Australian Regulators Expecting Longer Crypto Winter
The report comes despite the FTX debacle creating havoc in the industry.
Amid the government’s apparent lack of urgency, the final legislation may not pass until 2025. According to the report, the government intends to publish consultation papers in Q2 2023. Meanwhile, it will reportedly conduct stakeholder roundtables regarding licensing and cryptocurrency custody regulations in Q3 of this year.
Recently, Reuters claimed that thousands of Aussies now stand to lose millions of dollars to retirement income schemes, thanks to crypto. Investors reportedly used Do-it-yourself (DIY) pension funds to wager on cryptocurrencies in the country, leading to losses.
Meanwhile, Australian citizens are the preferred target of cryptocurrency scammers amid growing online thefts. Based on an investigation by European authorities into four Serbian call centers, Aussie wealth has turned them into scammers’ favorite target.
Despite an urgency for guardrails, the document underlines that the government is counting on crypto winter for now. The document reads, “While much of the innovative development continues, the demand from consumers and investors for crypto assets has weakened significantly for now.”
As per the Treasury, the current market conditions somewhat alleviate consumer protection and regulatory worries. Since consumers have less demand for cryptocurrency assets at the moment.
Therefore, the Cabinet is not anticipated to receive any final submissions until close to the end of this year. According to business analysts cited by the paper, the timeline indicates that legislation wouldn’t likely pass until well into 2024 or 2025.
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