By George Ward
As crypto lobby groups clamor against classifying all digital assets as financial products, the Australian finance minister says there is a need to regulate crypto assets as financial products. Except for a few opposing views, cryptocurrency in Australia is set to be handled as financial products.
Finance Minister Drives Classification Argument
According to Stephen Jones, the finance minister of Australia, there is a “good argument” for regulating the country’s crypto assets. Jones noted that other virtual currencies are financial products except for tokens like Bitcoin, which serves as a store of value for investment purposes.
Furthermore, the minister cited the recent FTX collapse as a wake-up call to regulators regarding the need for robust guidelines for the digital asset market. He affirmed that the Australian government had set its sights on regulating cryptocurrencies’ usage as financial products.
Jones stated that there is currently no need to establish another regulatory body for assets that are “financial products.” However, the minister added that the government would soon unveil the virtual assets it plans to regulate under the new “token mapping” move.
Lobby Groups Reacts
Meanwhile, the Australian crypto lobby group, Blockchain Australia, is opposed to the broad classification adopted by the Australian Securities and Investments Commission (ASIC).
Not only is the group at loggerheads with ASIC, but it also faulted the Commonwealth Bank over its decision to use a broad classifying concept that will see all crypto assets as financial products.
According to the group, a broad classification of all digital assets would harm investment drives and the sector’s expansion. In addition, the group cautioned the government on its proposed move, arguing that this would result in massive job losses.
Similarly, the Australian Bitcoin Industry Body (ABIB), another lobby group, added that the government’s lumping all crypto assets into one category is unwise. In addition, the group stressed that the action would hinder the government’s regulatory effort of the crypto industry’s sub-sector, making it challenging to regulate.
Stepping Up Regulatory Drive
Following the FTX collapse of November 2022, the Australian government has swiftly moved to ensure regulatory compliance in the crypto space. The government has pledged to establish a regulatory framework to guide license issuance and its enforcement within its jurisdiction.
Considering that the FTX debacle is the second high-profile crash involving a crypto trading platform after the Terra Luna incident, Australia has promised to ensure that the digital asset market is well-regulated.
The government intends to introduce additional regulatory guidelines to safeguard investors and their funds this year. While the country does not have comprehensive crypto laws explicitly designed for the sector, Australia has made it compulsory for businesses operating in the digital asset space to comply with several of its rules that apply to traditional financial institutions.
With crypto draft legislation already before the country’s parliament, critics opined that it is unlikely that the Labor government would approve the bill in its current form.