Australia Announces Crypto Regulation: Industry Reacts
After significant delays, the Australian federal government is implementing cryptocurrency regulations, prompting a cautiously optimistic response from the digital asset industry.
On a recent Friday, the Albanese government released its much-anticipated digital asset platforms policy. This policy mandates that cryptocurrency exchanges and fintech companies that hold customer assets adhere to the same fundamental governance standards as other financial service providers. This includes both Bitcoin and stablecoins. These standards will address issues such as honest and fair service provision, as well as conflict of interest avoidance. Furthermore, under these new regulations, crypto exchanges will be subject to minimum capital requirements to help mitigate the risk of collapses similar to the 2022 FTX incident, which left many Australian investors stranded.
Instead of mandating full market licenses for crypto exchanges—an approach previously considered by the Australian Securities and Investments Commission (ASIC)—the Treasury is now advocating for a more accessible pathway through the Australian Financial Services License (AFSL) regime.
For stablecoins, the policy introduces a new ‘stored-value facility’ framework that falls under the oversight of the Australian Prudential Regulation Authority (APRA), aligning them with other value-storing financial products. The policy also confirmed that there would be no new, crypto-specific tax legislation for the time being. The ATO will instead assemble a working group to deliver clearer tax advice to the sector under existing laws.
Industry Responses
Jonathon Miller, Kraken’s Australian managing director, welcomed the government’s new direction, particularly its potential to lessen the risk of debanking—a significant challenge for crypto platforms trying to access traditional banking infrastructure. “It’s great to see recognition of the urgent need for bespoke crypto legislation to address the existing confusion and uncertainty facing Australian crypto investors and businesses,” Miller told SmartCompany. “We believe that by establishing a clear crypto regulatory framework and mitigating problems like debanking, government can remove the barriers hampering growth in the Australian economy. We look forward to engaging constructively with policymakers and regulators as these new rules and regulations are developed.”
Mena Theodorou, co-founder of Coinstash, noted the changes provide “much-needed clarity” after years of regulatory uncertainty though he emphasized the need for a tailored regulatory approach. “This will provide much-needed clarity around regulation, which has been in limbo for years. The lack of a clear framework has been a frustrating challenge for legitimate businesses operating in this space,” Theodorou stated. “It will, however, be critical that these rules are applied in a way that makes sense for crypto, rather than simply copying traditional finance regulations onto a new industry.”
Similarly, Zerocap’s chief investment officer, Jonathan de Wet, agreed that greater regulatory certainty is a step in the right direction. However, he cautioned that the government must strike a balance between security and innovation. “Greater regulation of our industry is a huge opportunity, with the potential to remove part of our reliance on the resources sector. To get it right, the government will need to walk a tightrope between protecting consumers and businesses, while also allowing earlier-stage firms to still take risks in this nascent industry,” de Wet remarked.
The Broader Context
The cryptocurrency regulations signal a cautious but significant shift, according to the content of the article from SmartCompany which published the original story on October 17, 2024. The last two federal budgets, as SmartCompany reported earlier, barely mentioned crypto. The 2024 budget included just $7.5 million in shared funding for digital asset regulation—a sum that drew criticism from some in the sector, who argued it showed how deprioritized crypto had become in government circles. With the new regulations, this could change.
Industry leaders have long advocated for regulatory clarity to bolster consumer protection and encourage business expansion. Some are hopeful that the shift suggests increased engagement from legislators. However, the industry remains cautious about Australia falling behind other nations. Countries like Singapore, the UAE, and members of the EU have already made significant strides toward comprehensive frameworks to support crypto innovation and compliance. Recent developments in the US—including dismissed cases against Ripple and Coinbase—highlight how quickly the global regulatory environment can change as policy discussions continue.
With draft legislation scheduled for release later this year and a federal budget on the horizon, local startups and digital asset firms will be closely monitoring whether this policy shift translates into effective regulatory outcomes.
