The Australian treasury is taking action to improve the regulatory framework of its crypto service providers and ensure additional safeguards for its citizens in the crypto space.
This move is part of the country’s plan to modernise its financial system in the wake of the FTX collapse and other worrying events that have driven authorities and lawmakers into action.
In doing so, Australia will become the first country to pioneer a ‘Token Mapping’ exercise in an attempt to define its various types of digital assets and bring them under a regulatory framework.
Following the release of token mapping, the government will consult on a custody and licensing framework next year before introducing legislation.
The Albanese Government is working to modernise Australia’s financial system, positioning our economy to embrace new opportunities and respond to future challenges #auspol #auseconhttps://t.co/OvFEN5aKcP— Jim Chalmers MP (@JEChalmers) December 13, 2022
Token mapping exercise
In August, Australia's Treasury revealed that it would roll out a token mapping exercise to collate all the digital assets under one regulatory framework.
This exercise aims to outline new rules on digital assets in order to safeguard and educate consumers about extreme market volatility and the possible pitfalls of crypto investments.
Australian Treasurer Jim Chalmers said that the government would consult on matters relating to its ongoing token mapping work, before introducing any legislation.
“Our reforms are about starting to fix that in pursuit of a financial system that is stronger and more secure,” he added.
Consultation paper
The regulation framework of crypto service providers forms part of an overarching strategic plan for all payments systems across Australia, which is set to be launched in the first quarter of 2023.
Subsequently, the treasury has drafted a consultation paper, which is open to feedback till February 6, 2023.
The consultation paper touches upon various aspects of the crypto ecosystem including digital wallets, stablecoins, crypto assets and central bank digital currencies.