In an exclusive interview with the chair of the Australian Digital Financial Standards Advisory Council (ADFSAC), Loretta Joseph, she expressed concerns that the country might be outperformed by other nations regulating the crypto sector. Joseph requested the Australian authority to expedite the drafting of the crypto regulation.
She lamented the failure to implement new crypto regulations might limit the country from coping with the emerging economies.
Why is Australia Reluctant in Developing Crypto Regulations?
In a previous report, the Australian authority launched a public consultation where the regulators urged the community to provide feedback on the classification of four digital assets. Subsequently, the Australian authority launched a consultation report dubbed token mapping, which outlined the fundamental steps to regulate the crypto sector.
Following an embroiled dialogue between the Australian financial watchdogs, the regulators intend to launch another consultation paper in Q2. The proposed consultation report will guide the regulators in developing a suitable licensing framework for cryptos.
Afterward, the regulators will mull the implementation of a new crypto licensing regime in Q3 of 2023. In March, Australian senator Andrew Bragg submitted a new regulatory provision dubbed Digital Assets Bill of 2023, which suggests various regulatory measures required to supervise the crypto industry.
Senator Bragg also proposed ways to safeguard the consumer and investors’ interest in the vibrant crypto market. A review of the bill reveals that Senator Bragg outlined several recommendations for issuing stablecoins, custodial service provider requirements, and crypto licensing.
Will Australia Cope with Other Emerging Economies?
Despite the efforts made by the Australian regulators to create a friendly regulatory landscape for crypto, the implementation of the proposed rules has been limited by delays. Referring to the regulatory approach implemented in Mauritius, Bermuda, and Nigeria, Joseph confessed that Australia is raging behind in adopting new crypto rules.
She explained the numerous benefits of decentralized technology in improving people’s well-being. Joseph also described the Australian regulatory method as slow compared to other fast-growing countries.
In March, the Bermuda authorities engaged in prolonged debates to discuss the regulatory approach for crypto and blockchain technology. The Bermuda regulatory action replicates the crypto rulemaking process adopted by the Mauritius and Nigerian market regulators.
A close examination of the regulatory approach implemented by other countries, Joseph underscored the need to fast-track the development of crypto laws in Australia. While other countries seek to implement regulatory clarity on crypto assets, Australia is still formulating Bitcoin and Ethereum regulations.
Joseph lamented that the Australian authority is pursuing ways to conduct token mapping tests. She confessed that the current legislation on crypto lacks some of the main features of crypto assets.
Overview of Global Crypto Regualation
In his report, Joseph advised the regulators to amend the existing crypto regulations. Also, Joseph urged the financial watchdogs to reconsider adopting new crypto regulations that support innovation.
In 2017 Joseph confirmed to be a member of the policymakers formulating the Australia crypto rules. She mentioned that her role in rulemaking motivated Joseph to assist the Bermudian regulators in straucturing a crypto bills which was passed into law in 2018.
Interestingly the need for a clear regulatory framework inspired Joseph to establish ADFSAC. Joseph stated that the main objective of ADFSAC aimed to encourage individuals from academia, government, and policymaking to participate in the formulation of legislation actively.
She believes that effective legislation requires input from diverse groups. Joseph acknowledged the efforts of think tanks in conducting research and the entire rulemaking process. She encourages the community to join efforts in the legislative works.
Reflecting on ADFSAC’s main objective, Joseph mentioned that the institution would prioritize ammending crypto regulation. Joseph argued that to remain ahead of the curve; the Australian authority is required to follow the footsteps of the International Organization of Securities Commissions (IOSC), the Financial Action Task Force (FATF), and the Financial Stability Board (FSB). She added that the regulators should align their core objectives to “the global standard setters.”
Joseph projects that the proposal on crypto regulations issued by the G7 and G20 members will soon materialize. Recalling the recent meeting held by governmental agencies, Joseph mentioned that some crypto firms would flee from a jurisdiction with tough policies to uphold compliance.