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Australia’s Senate Rejects Crypto Regulation Bill

2 min read

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After months of inquiry, the Australian Senate has rejected the Digital Assets (Market Regulation) Bill 2023 introduced by Senator Andrew Bragg.

The Bill, initially introduced in March 2023 by Sen. Bragg, sought to implement a licensing regime for digital assets, and establish reporting requirements for the circulation of central bank digital currency (CBDC) in Australia.

The Bill was referred to the Senate’s Economics Legislation Committee, and a progress reports were presented in June, August, and September 2023. A public hearing that gathered industry experts before the Senate also took place in July.

However, today, the Economics Legislation Committee concluded in a report that the Digital Assets (Market Regulation) Bill 2023 is at odds with the measured and industry accepted approach the government is undertaking to ensure that current and new regulations are well considered and effective in supporting
consumers and the digital assets industry.

On top of this, the Committee also critiqued that Sen. Bragg’s Bill lacks the detail and certainty that investors, consumers, and the industry should be provided with.

Crucially, the bill fails to interoperate with the established regulatory landscape, creating a genuine concern for regulatory arbitrage and adverse outcomes to the industry, the report concluded.

The Committee’s report also points to the Australian Treasury’s ongoing token mapping exercise, and states that further consultation on digital assets licensing and custody requirements is anticipated in the coming weeks.

In a statement to The Chainsaw, Sen. Bragg said that the Senate’s rejection of the Bill has left consumers exposed to the risks of an unregulated market, and has driven investment offshore.

The Bill demonstrates an Australian crypto bill is entirely viable… When governments have failed to move on proper inquiries into the financial sector, the Senate has forced their hand. The Senate should do the same on crypto regulation, Sen. Bragg explains.

What it means for crypto in Australia

Speaking to The Chainsaw, Lachlan Feeney, founder and CEO of Brisbane-based Web3 development firm Labrys, says that the Committee’s knocking back of the Bill is a frustrating move for industry players.

I read this as just crypto not being at the top of the [government’s] agenda, especially where the crypto industry is at the moment. It’s put on the back burner, he explains.

A lot of people forget that regulatory clarity is really about protecting consumers, and because there is none of that at the moment, consumers are at risk. Feeney says.

Feeney also highlight that the current government’s token-mapping exercise is nothing revolutionary and does little to reassure and educate consumers of the risks of the crypto industry.

Most of what [is being explored] in the token-mapping exercise, at least within the industry, are fairly well understood. For now, we are going to have to wait further to see any meaningful outcome for the industry, he adds.