Government promises cryptocurrency regulation study

The government is set to conduct an inquiry into how Australia’s financial regulators manage cryptocurrency assets.

In a joint statement, Treasurer Jim Chalmers, Assistant Treasurer and minister for financial services Stephen Jones, and Assistant Minister for competition, charities and treasury Dr Andrew Leigh, promised a consultation paper on “token mapping” would be issued “soon”. 

The token mapping exercise will try to “identify notable gaps in the regulatory framework, progress work on a licensing framework, review innovative organisational structures, look at custody obligations for third party custodians of crypto assets and provide additional consumer safeguards”, the statement said.

The government noted that cryptocurrencies are largely unregulated at the moment, “and we need to do some work to get the balance right so we can embrace new and innovative technologies while safeguarding consumers. 

“Our government is ready to start consultation with stakeholders on a framework for industry and regulators, which allows consumers to participate in the market while also better protecting them,” the statement continued.

Treasury’s token mapping will help identify how crypto assets and services should be regulated, an exercise the ministers said “hasn’t been done anywhere else in the world, so it will make Australia leaders in this work.

“The aim will be to identify notable gaps in the regulatory framework, progress work on a licensing framework, review innovative organisational structures, look at custody obligations for third party custodians of crypto assets and provide additional consumer safeguards,” the statement said.