Australia to tighten cryptocurrency regulation: Bill to bring crypto industry closer...

Australia to tighten cryptocurrency regulation: Bill to bring crypto industry closer to financial institutions

Australia is moving closer to a key reform in the cryptocurrency sector. The government has introduced a new bill that would regulate crypto platforms under existing financial laws and ensure greater protection for clients. The aim is to attract investment, encourage innovation and reduce the risk of fraud.

The new law would require exchanges and cryptocurrency custody providers, for example, to obtain a license from the Australian Financial Services Authority (AFSL). “Digital assets are changing global finance and Australia must keep up,” said Deputy Treasurer Daniel Mulino. He admitted that the current legislation is insufficient, and the new law should reduce gaps and adapt the rules to new technologies.

According to Mulino, the legislation should protect clients from risks, such as fraudulent practices or losses caused by cases like FTX. Today, it is possible for companies to hold an unlimited amount of cryptocurrencies without a clear legal framework, which can be dangerous.

The bill also introduces two new licenses for a “digital asset platform” and a “tokenized custody platform,” which will require an AFSL license. This will make platforms that trade or provide advice on cryptocurrencies regulated entities. Small firms with low transaction volumes (under AUD 10 million per year) could be exempted from some of the obligations.

Mulino stressed that the bill is flexible and can evolve as the crypto world changes. The legislation is expected to come into force within 18 months, allowing firms to prepare for the new conditions.

The bill is expected to pass easily in the lower house of parliament, where the government has a majority, and then in the Senate, where broader support may be needed.

This legislative change is a significant step towards the inclusion of cryptocurrencies as regulated financial instruments in Australia, giving the country a stronger position in the global crypto space.

*This is not investment advice.

The Coingarage Team