The Australian government has made new amendments to its legal regulations of digital assets that seek to improve the marketplace’s solidity and consumer safeguard.
The regulations will exempt small businesses and firms outside the financial service sector, while larger cryptocurrency trading platforms will have to seek an Australian Financial Services License (AFSL).
The proposal requires stablecoin issuers, digital asset trading platforms, and their service providers to follow the current financial services laws. These are in line with global regulatory laws such as the Singapore Payment Services Act and the European Union’s Markets in Crypto-Assets (MiCA) regulation.
As stated by the Treasury on Thursday, the country’s position in the digital asset economy will improve if the country aligns with global standards. This approach includes phased regulation which could be likened to similar actions which the EU has used before.
Who’s affected?
Companies that support tokenized stored-value facilities, like some stablecoin issuers, will also have licensing and compliance requirements. However, the new rules will not apply to businesses that build software, maintain infrastructure, or engage in non-financial activity.
The government’s strategy is consistent with comparable regulatory approaches around the globe. The EU has passed laws such as AMLD5 for crypto exchanges, the E-Money Directive for stablecoins, and MiFID II for security tokens before passing MiCA. Rather than implement a completely new framework, Australia’s strategy falls into this category in that it fits the current Australian regulatory frameworks for financial assets.
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Like other countries, Singapore has widened the scope of its Payment Services Act to embrace those crypto services in the licensing and compliance sphere. Although this supports the notion that the sector is safe and can operate freely within the Australian legal framework, the Australian Treasury believes that this will provide certainty to the businesses.
No new crypto taxes, but more regulatory clarity ahead
Notably, it also notes that there will be no new laws on tax on cryptocurrencies or anything related to cryptos. However, ATO will develop a working group to help offer more certainty under existing regulations.
Kraken’s Australian managing director, Jonathon Miller, commended the approach, asserting that it could decrease debanking risks.
Australia has gradually tightened its rules for the crypto industry, and the Australian Securities and Investments Commission (ASIC) recommended such firms obtain an AFSL not to break the law. Currently, the ASIC has finally published on issuing an exposure draft paper regarding the changes it intends to bring regarding digital assets.
The amendments to INFO 225 also define under which conditions stablecoins, wrapped tokens, and staking services are to be regarded as financial products. The document suggests 13 occasions to ensure compliance with the Corporations Act.
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