Australian Senator Andrew Bragg has proposed a private bill, the Digital Assets (Market Regulation) Bill 2023, to regulate the cryptocurrency industry in the country. The bill aims to protect consumers and promote investment by establishing regulatory standards for stablecoins, licensing exchanges, and setting custody requirements.
Furthermore, the bill tackles the inaction of the Australian government in providing regulatory clarity to the cryptocurrency industry, which has exposed consumers to industry-wide events such as the collapse of FTX. Should the bill be approved, it would mandate a license from the Securities and Investments Commission in Australia or a foreign license to operate a cryptocurrency exchange, custody service, or stablecoin issuer within Australia.
The bill mandates a range of responsibilities and prerequisites, such as minimum reserve requirements, segregation of customer funds, reporting on customer holdings, auditing, assurance, and disclosure arrangements. Typically, Australian ministers introduce proposed regulatory changes; however, members of parliament may introduce private bills, which can take months or years to pass through parliament.
In addition, public consultation is ongoing in Australia concerning the classification of cryptocurrencies, digital asset tokens, services, and platforms. The “token mapping” consultation paper released in February provided fundamental definitions for the cryptocurrency sector. The bill intends to establish a regulatory framework for the cryptocurrency industry that safeguards consumers and encourages investment.