The Australian government has introduced a new consultation document to regulate 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-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. Furthermore, digital assets used in activities such as video gaming, gambling, and the Metaverse were 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 to protect consumers and promote investors.
This follows the decision of one of Australia’s major banks, the Commonwealth Bank of Australia (CBA), to retract its plan to launch a crypto trading app last year.
In November 2021, CBA revealed its plans to launch a crypto trading app within its banking app for a pilot release in 2022. The bank had aimed to collaborate with both crypto exchange Gemini and blockchain analysis firm Chainalysis.
Read more: 15 Most Common Crypto Scams To Look Out For
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