In a significant step towards regulating Australia’s burgeoning cryptocurrency industry, the Australian Treasury has unveiled plans to establish a comprehensive licensing framework for cryptocurrency exchanges.
In a significant step towards regulating Australia’s burgeoning cryptocurrency industry, the Australian Treasury has unveiled plans to establish a comprehensive licensing framework for cryptocurrency exchanges. This initiative aims to strengthen consumer protection, provide much-needed clarity to the digital asset sector, and bring Australia in line with international regulatory standards.
Under the newly proposed framework, cryptocurrency exchanges operating in Australia will be required to obtain an Australian Financial Services license (AFSL) issued by the Australian Securities and Investments Commission (ASIC).
This regulatory requirement will apply to exchanges holding more than AUD 1,500 of a single client’s assets or having total assets exceeding AUD 5 million. The goal is to ensure that exchanges are well-equipped to safeguard their customers’ interests and adhere to stringent financial and operational standards.
The Treasury’s roadmap includes plans to release draft legislation covering licensing and custody regulations for crypto asset providers by 2024. Once the legislation becomes law, cryptocurrency exchanges will have a 12-month transition period to align their operations with the new regulatory framework. This means that it may be until 2025 before an Australian digital asset platform can receive a license under this updated regulatory system.
The proposed regulatory framework prioritizes consumer interests while seeking to strike a balance between ensuring consumer protection and fostering innovation in the cryptocurrency sector.
