The relatively new Australian government of Prime Minister Anthony Albanese has broken its silence on crypto regulations, saying it plans to improve the way the system manages crypto assets and provide greater protections for consumers.

Australian Treasurer Jim Chalmers announced a “token mapping” exercise, which was one of the 12 recommendations in a senate inquiry report last year on “Australia as a Technology and Financial Center.” The report was warmly welcomed by the industry, which has been anxiously waiting to see if the Australian Labor Party (ALP) government would embrace it.

Aimed at being conducted before the end of the year, the token mapping exercise is expected to help “identify how crypto assets and related services should be regulated” and inform future regulatory decisions. The incumbent administration has declared its hand on cryptocurrency three months after being elected into power; it is now speaking about how it is planning to approach crypto regulation. 

Framing a regulatory regime

Cointelegraph, in a recent report, said it has been informed that Treasury will also undertake work on some of the other recommendations in the near future, including a licensing framework for crypto asset service providers dealing in non-financial product crypto assets. This is in addition to the development of appropriate requirements to safeguard the consumer crypto asset custody, and a review of the decentralised autonomous organisation (DAO) company-style structure.

In a statement from Chalmers, along with Assistant Treasurer and Minister for Financial Services Stephen Jones and Assistant Minister for Competition and Treasury Andrew Leigh, it was revealed that the Albanese administration wants to reign in on a “largely unregulated” crypto sector.

The statement noted, “as it stands, the crypto sector is largely unregulated, and we need to do some work to get the balance right so we can embrace new and innovative technologies,” pointing out that more than one million taxpayers have interacted with the crypto ecosystem since 2018 and yet “regulation is struggling to keep pace and adapt with the crypto asset sector.”

The politicians claimed that the previous Liberal-led government had previously “dabbled” in crypto asset regulation through crypto secondary service providers “without first understanding what was being regulated. However, the Albanese Government is taking a more serious approach to working out what is in the ecosystem and what risks need to be looked at first.”

Token mapping exercise

Speaking to Cointelegraph, Michael Bacina, partner at Piper Alderman, said the token mapping exercise will be an “important step” to bridge the significant education gap between regulators and policymakers. He added that such sensible token mapping exercise would help regulators and policymakers understand in depth the activities they are looking to regulate and how the technology interfaces with those;

Caroline Bowler, CEO of BTC Markets, said the move mirrors calls from many in the industry for “proportional, appropriate regulation” of the sector explaining that, “the additional benefits of token mapping are many. It will provide greater clarity to crypto investors; aid companies in developing their own blockchain-based innovations; provide guidance to digital currency exchanges; as well as assist regulators in shaping an appropriate regulatory regime.”

However, Aaron Lane, a senior lecturer at the RMIT Blockchain Innovation Hub, was of the view that the token mapping exercise is something of a delaying tactic by the Labor government, arguing “progress is progress — but it is disappointing that we are not further along the path to greater regulatory certainty for industry and greater protections for consumers.”