Australian Crypto Regulations: Customer Protection is a Priority

• Regulation to focus on protecting customer interests. 
• A consultation paper was released to explore the elements of the ecosystem. 

Everything that happened in the crypto industry in 2022 greatly emphasized the dire requirement for crypto regulations. Every nation in the world is trying to regulate this complex financial instrument. The Australian government said about taking steps ensuring ‘regulation of crypto assets protects consumers,’ as these steps are supposed to reform “the licensing and custody of crypto assets.” 

The government, led by Anthony Norman, talked about releasing a consultation paper, exploring the elements of the crypto ecosystem which are adequately regulated and other aspects which require additional attention. Along with securing customer protection, and other reforms special emphasis would be given to the cryptocurrencies “that currently fall outside the financial services regulatory framework.”

According to the statement released by the government on February 3, 2023, the government has intentions to subject the crypto assets service providers with “a set of obligations and operational standards.” Adding that these standards are instilled to safeguard the digital funds of customers. Regarding the design of licensing and custodial framework, the government said it might start the public consultation process by mid of 2023, allowing enough consultation before the introduction.

The statement adds that, although the recent steps taken are to protect the customers, still more work is required. The released consultation process would explore the challenges and other possible risks ahead in detail. This would allow stakeholders and the Government extensively focus on the regulatory gaps, ensuring the upcoming risks are identified and dealt with, making it future-ready in a way. 

The statement further highlights the government’s intention to keep working with stakeholders, as they want it to be done the old way. This will allow them to get all the policy settings correct, as they intend to protect consumers and support innovations in the exciting and ever-emerging sector. 

Aside from planned crypto custody and a strong licensing framework, the government of Australia speaks about the already taken steps for ensuring the consumers’ protection. Some steps include increasing the number of members in the Australian Securities and Investment Commission (ASIC)’s crypto team. Which could help in stopping deceits and cons, along with detecting money laundering, terror funding, or drug financing are also included in the steps taken into consideration. 

All the events of 2022 intensified the need for crypto regulations. Even after collapses, bankruptcies, and related problems, not a single question was raised about the technology and its potential. All the fingers were pointed at some bad players and a visible lack of regulations. The sector is very complex for regulations to be applied in haste; all aspects must be considered and studied well before taking further steps. This is what every government is supposedly doing to tame the beast. 

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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