Australia's proposed "Digital Assets (Market Regulation) Bill 2023" has been rejected by the country's Senate Committee on Economic Legislation due to concerns over its effectiveness. The committee has suggested that the government conduct further research on digital asset market regulation before introducing any new legislation. Senator Andrew Bragg's bill faced a series of delays before being rejected, disappointing many who had hoped for progress in regulating the cryptocurrency market. Australian Lawmakers Reject Crypto Bill
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Crypto Assets Are “Technically Complex”
In its thoughts, the Committee commented:
“However, crypto assets can be technically complex, difficult to store in custody safely and highly price volatile. Between November 2022 and January 2023, the global market capitalisation of crypto assets declined 63 per cent from AU $4.1 trillion to AU $1.5 trillion.20 Declines in asset prices, combined with poor business practices, has resulted in several high-profile collapses in the crypto ecosystem. Scams also remain a key challenge for the crypto industry.”
The Committee further outlined the “key risks relating to crypto assets,” as the Department of Treasury reported. According to the Treasury, the risks relating to crypto assets are the potential for:
Financial losses to consumers from engaging in the crypto ecosystem;
financial risk to traditional firms engaging with the crypto ecosystem;
and financial risk from the mainstream adoption of novel products that may turn out to be riskier than their traditional counterparts.”
The draft bill regarding regulation of crypto services providers in Australia has experienced several delays. Initially introduced by Senator Andrew Bragg in late March 2023, the implementation of the bill was postponed to 2024 to gain a more comprehensive understanding of the industry. Senator Bragg and Senator Dean Smith have published a report suggesting minor amendments to the bill, including the removal of NFTs from the definition of regulated digital assets. They have also urged the Board of Taxation to review its treatment of tax levied on digital assets and transactions within the country, and proposed the introduction of relevant legislation by early 2024. In their dissenting report, the Senators have expressed their opposing views.
“The committee inquiry has demonstrated that the government’s approach to digital asset regulation is hurting Australian consumers and investment.”
The bill is the “first serious step towards implementing a comprehensive digital asset regulatory framework.”
They further opined:
“The government has junked the ambitious crypto agenda of the former liberal government, and Australians will pay the price.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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