The Australian government, led by Prime Minister Anthony Albanese, has announced plans to regulate crypto exchanges, custody services, and some brokerage firms under existing financial services laws. The Treasury Department confirmed on March 21 that these platforms will soon be required to:
- Obtain an Australian Financial Services Licence (AFSL)
- Follow asset safeguarding rules
- Meet minimum capital requirements
The proposed regulatory framework comes ahead of Australia’s federal election, set to take place by May 17, where the ruling Labor Party and the opposition Coalition are currently in a tight race.
What the New Crypto Laws Will Cover
The government has outlined a four-priority approach to crypto regulation:
- Exchanges and Custodians: Platforms that trade or store crypto will be subject to financial service regulations.
- Exemptions: Small-scale crypto startups, blockchain software developers, and non-financial digital assets will not be covered.
- Stablecoins: Treated as stored-value facilities, but certain stablecoins and wrapped tokens will be exempt.
- Trading Activity: Secondary market trading in digital assets will not automatically classify an exchange as a regulated market.
This measured approach aims to ensure consumer protection without stifling innovation in the crypto industry.
Government Promises Action on Debanking
Alongside the new crypto laws, the Albanese government has committed to addressing the issue of debanking, where crypto-related businesses are denied banking services. The government plans to:
- Collaborate with Australia’s four largest banks to assess the scale of debanking.
- Launch an Enhanced Regulatory Sandbox in 2025 to allow businesses to test new financial products without requiring a license.
- Review the potential for a central bank digital currency (CBDC).
Industry Leaders React to the Proposed Regulations
- Caroline Bowler, CEO of BTC Markets, supports the reforms but emphasizes the need for clarity on capital adequacy and custody requirements: “We need to ensure that these requirements aren’t overly burdensome for business investment in Australia.”
- Jonathon Miller, Managing Director of Kraken Australia, highlights the urgency of clear regulations: “By establishing a clear crypto regulatory framework and mitigating problems like debanking, the government can remove barriers hampering growth in the Australian economy.”
Will the Regulations Change After the Election?
The future of Australia’s crypto regulations could be influenced by the upcoming federal election. The opposition Coalition, led by Peter Dutton, has also promised to prioritize crypto regulation if elected.
According to the latest YouGov poll (March 20), the race between Labor and the Coalition remains tight, with Prime Minister Albanese slightly ahead as the preferred leader.
Regardless of the election outcome, Australia is moving towards greater regulatory clarity in crypto, a move that could strengthen its position in the global digital asset industry.