In a move that has sent ripples through the Australian crypto community, the Senate Committee on Economics Legislation has recommended against the passage of the Digital Assets (Market Regulation) Bill 2023. The bill, introduced by Opposition Senator Andrew Bragg, aimed to establish a comprehensive regulatory framework for digital assets, including stablecoins and licensing of exchanges.
A divided opinion on crypto regulation
The committee’s decision, announced on September 4, comes after multiple deadline extensions for providing feedback on the bill. While the committee advised that the Senate should not pass the bill and instead continue researching the topic, a dissenting report from Senators Bragg and Dean Smith offered a contrasting viewpoint. They suggested that the Senate should pass the bill with minor amendments, such as removing nonfungible tokens (NFTs) from the definition of regulated digital assets. The dissenting lawmakers also recommended extending the transition period for the bill’s implementation from three to nine months.
Among other suggestions, the dissenting report urged the Board of Taxation to review the tax treatment of digital assets and transactions in Australia. It aimed for the introduction of relevant legislation by early 2024. The report also emphasized the need for implementing the recommendations of the Council of Financial Regulators to address the issue of banks cutting services to cryptocurrency firms, a trend that could potentially drive the industry underground.
The future of crypto regulation in Australia
The committee’s decision has sparked a debate on the future of digital asset regulation in Australia. The dissenting report argued that the government’s current approach is detrimental to Australian consumers and investment. It stated that the bill represented the “first serious step towards implementing a comprehensive digital asset regulatory framework.”
Senator Bragg had initially introduced the bill in March with the aim of protecting consumers and promoting investors. The draft bill had outlined regulatory recommendations for stablecoins, licensing of exchanges, and custody requirements. The committee’s rejection of the bill marks a significant setback for those advocating for a more structured approach to digital asset regulation in Australia.