Senator Andrew Bragg is pushing once again to introduce regulation for the cryptocurrency sector in Australia, amid ongoing exchange collapses and US regulators investigating alleged illegal activity by Binance.
The NSW Liberal, now in opposition, introduced a private senator’s bill to the Senate on Wednesday, accusing financial services minister Stephen Jones of being “uninterested in regulating digital assets”.
The Bragg Bill sets out a licensing regime and regulatory requirements for digital asset markets and custody services; issuing stablecoins and reserve rules; and reporting requirements for central bank digital currencies.
Bragg previously chaired a Senate committee that handed down a landmark roadmap on crypto regulation in 2021, which made 12 recommendations. It looked at issues such as regulation and consumer protection, the fintech terror of “debanking”, and the taxation of digital assets, setting our a legislative roadmap with 12 recommendations that were embraced by the former Coalition government. A year ago Treasury began public consultations on custody and licensing requirements.
After Labor won the federal election in May last year, new treasurer Jim Chalmers and assistant treasurer Stephen Jones, announced an additional review into the sector in August. It set out to map out Australia’s cryptocurrency landscape.
In the time between the Senate report and now, several crypto exchanges have collapsed, most notably FTX, with founder Sam Bankman-Fried now facing multiple charges from US regulators. That failure cost Australian investors millions of dollars, with FTX Australia now in liquidation, and reverberated through the local crypto sector.
Most notably, plans for crypto exchange Swyftx to merge with trading app Superhero to create a $1.5 billion fintech fell apart late last year, and local exchanges have shed hundreds of jobs amid the broader tech downturn.
In recent weeks, two mainstream US banks heavily involved in the crypto space, Signature and Silvergate collapsed, alongside Silicon Valley Bank, adding to wariness about crypto in the financial sector, despite subsequent rises in the value of bitcoin and other crypto currencies.
Last September, Senator Bragg released a draft version of his digital assets regulation bill for consultation. His Private Senator’s Bill, the Digital Assets (Market Regulation) Bill 2023, will likely be referred to a committee by the chamber, but the crypto advocate says Australia is losing the race to regulate digital assets.
“When Labor came to power, they had the opportunity to complete the world-leading regulatory process initiated by the former Liberal Government,” Senator Bragg said.
“Instead of using the consultations already undertaken, Labor and Mr Jones decided to restart the process in May 2022. Mr Jones has hurt consumers. Labor has exposed Australians to the crash of FTX last November. There will be more collapses in this unregulated marketplace. Since November, all we have received from Mr Jones is a skinny.” pamphlet on token mapping.
Bragg said his bill will protect consumers and promote investment.
“Licensing for exchanges, custody requirements and stablecoins are included in the Bill,” he said.
“Australia can be a digital asset hub whilst protecting digital asset consumers. But we must act now.”
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