The Senate Committee on Economics Legislation has recommended against the passage of the Digital Assets (Market Regulation) Bill 2023, introduced by Senator Andrew Bragg.
The committee has urged the Australian Government to continue researching digital asset market regulation rather than passing the existing bill.
Initially set to deliver its review by August 2, the committee faced multiple delays before ultimately releasing its recommendation.
Bragg, who introduced the draft legislation in March, intended to establish regulations governing stablecoins, digital exchange licensing and custody requirements for the purpose of consumer protection and investment promotion.
Dissenting report
A dissenting report from Senators Bragg and Dean Smith diverged from the committee’s majority opinion.
“The committee inquiry has demonstrated that the government’s approach to digital asset regulation is hurting Australian consumers and investment,” the report states.
“The government has junked the ambitious crypto agenda of the former Liberal government and Australians will pay the price.”
They advocated for the Senate to pass the bill with minor amendments, specifically removing nonfungible tokens (NFTs) from its scope.
Additionally, they proposed redefining stablecoins to exclude certain asset-based tokens, potentially such as the Gold and Silver Standard and the BetaCarbon Token.
The senators also recommended extending the transition period for compliance from three to nine months.
Labor has locked Australia in the slow lane on digital assets. https://t.co/O5FhYy70Eg— Senator Andrew Bragg (@ajamesbragg) September 4, 2023
Fraught with challenges
The dissenting report criticized the government's current approach, warning that it could deter investment and consumer engagement in digital assets
Bragg and Smith also called on the Board of Taxation to review tax treatment for digital assets, aiming for legislative changes by early 2024.
The Senate committee's reservations, coupled with internal dissent, indicate that the path to a comprehensive regulatory framework for digital assets in Australia remains fraught with challenges.