Is Australia Ready to Regulate Crypto Like Financial Products?

23 January 2023, 12:00 GMT+0000
Updated by Geraint Price
23 January 2023, 12:01 GMT+0000
In Brief
  • Aussie Minister Stephen Jones believes there are 'good arguments' to treat crypto as financial products.
  • Local reports note that cryptocurrency regulation will be a major concern in the fintech sector in 2023.
  • Last year, the Australian government hinted at token mapping as a priority.
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Financial Services Minister Stephen Jones believes there are “good arguments: to treat crypto as financial products in Australian legislation.

The Australian Securities and Investments Commission (ASIC) and the Commonwealth Bank favor the argument, but the lobby group Blockchain Australia are against it.

If other coins or tokens are effectively used as a store of value for investment and speculation, there is a strong case for treating them as a financial product, says Jones.

Crypto Token Mapping to Launch Shortly

According to a report in the Sydney Morning Herald, cryptocurrency regulation will be a major concern in the fintech sector in 2023. Meanwhile, the government will launch a “token mapping” effort shortly, according to Jones.

Last year, the Australian government highlighted the token mapping exercise as a priority. It will launch a consultation paper soon.

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Jones told the media outlet: “I don’t want to pre-judge the outcomes of the consultation process we are about to embark on. But I start from the position that if it looks like a duck, walks like a duck and sounds like a duck then it should be treated like one,”

Australia is ramping up regulations. But it is also one of the many countries working on a central bank digital currency (CBDC).

Australian Market Could Set Global Standards

The recent market slump has kept only a few industry players from launching Web3 products. But, the National Australia Bank (NAB), one of the biggest banks in Australia, created its AUDN stablecoin last week. It came after a similar introduction by rival ANZ Bank the past year.

This also raised questions about how these crypto products will be regulated. Jones stated that he is not particularly interested in creating an entirely new regulatory framework for what is essentially a financial product. His statement comes as numerous nations worldwide have decided not to label crypto assets as financial goods.

Recently, RBI governor Shaktikanta Das argued: “Crypto is not a financial product then, therefore crypto masquerading as a financial product or asset is completely a misplaced argument.”

Contrarily, in 2022, the Financial Sector Conduct Authority (FSCA) of South Africa categorized crypto assets as financial products. In the U.S., the chairman of the Securities and Exchange Commission (SEC), Gary Gensler, has ignited another debate. He has frequently classified several crypto assets as “securities.” A characterization that has prolonged the Ripple Labs and SEC legal battle.

Disclaimer

BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.