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Australian Senator Proposes Digital Asset Regulation Bill

Senator Andrew Bragg of Australia has submitted a private senators’ bill, the Digital Assets (Market Regulation) Bill 2023, to the Australian Parliament. The proposed bill aims to regulate stablecoins, licensing of exchanges, and custody requirements to protect consumers and promote investment in the country’s cryptocurrency market.

Australia is known for its progressive stance on cryptocurrency regulation. The proposed regulatory changes are intended to provide a regulatory framework for cryptocurrency exchanges, custody services, and stablecoin issuers in Australia. The bill is designed to protect consumers while providing guidelines for reporting information by authorized deposit-taking institutions for the issuance and control of a central bank digital currency.

Senator Bragg has criticized the current Labor government for not following through on 12 recommendations relating to cryptocurrency regulation introduced by the Senate Select Committee on Australia as a Technology and Financial Centre in October 2021. He highlighted that the inaction of the Australian government to provide regulatory clarity to the sector had left Australian consumers exposed to industry-wide events like the collapse of FTX.

The proposed act sets out various obligations and requirements for exchanges, custody services, and stablecoin issuers. These include capital or minimum reserve requirements, segregation of customer funds, reporting on customer holdings, auditing, assurance, and disclosure arrangements.

The bill would require a person or business to hold a license granted by the Australian Securities and Investments Commission or a foreign license to operate a cryptocurrency exchange, custody service, or stablecoin issuer in Australia.

Unlike the typical introduction of regulatory changes by Australian ministers, members of parliament can introduce private members’ or private senators’ bills, which can take months or years to pass through parliament. As a result, it may take some time before the Digital Assets (Market Regulation) Bill 2023 is passed into law.

Public consultation is currently ongoing in Australia over the classification of cryptocurrencies and various digital asset tokens, services, and platforms. The “token mapping” consultation paper was released in February, outlining basic definitions for the cryptocurrency sector.

If passed, the proposed bill by Senator Bragg would be a significant step towards regulating the cryptocurrency sector in Australia. It would ensure the protection of consumers and promote investment in the country’s growing digital assets market. The bill would provide a clear regulatory framework for cryptocurrency exchanges, custody services, and stablecoin issuers to operate in Australia.

Overall, the Digital Assets (Market Regulation) Bill 2023 is a positive step towards regulating the cryptocurrency sector in Australia. It is intended to protect consumers, promote investment, and provide a clear regulatory framework for cryptocurrency exchanges, custody services, and stablecoin issuers to operate in Australia. The bill is currently undergoing public consultation, and it may take some time before it is passed into law.

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