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Australia first in the world to review crypto reforms: what this means for your investment
The federal government will carry out a comprehensive review of the regulatory practices required to oversee developments and provide adequate consumer protections for Australia’s burgeoning cryptocurrency industry.
In a statement released this week federal treasurer Jim Chalmers revealed that the government will perform a “token mapping” analysis, with the aim of instituting a regulatory and licensing framework for crypto assets and related services, as well as establishing consumer safeguards.
The review will also assess innovative organisational structures and scrutinise custody obligations for third party custodians of cryptocurrencies, such as digital exchanges and hot wallet services.
“This hasn’t been done anywhere else in the world, so it will make Australia leaders in this work,” Chalmers said.
“With the increasingly widespread proliferation of crypto assets - to the extent that crypto advertisements can be seen plastered all over big sporting events - we need to make sure customers engaging with crypto are adequately informed and protected.”
The newly-elected Labor government has been criticised for its lack of crypto-focused policies. This forthcoming review advances its pledge earlier this year to overhaul the digital payments system.
Chalmers affirmed that stakeholder consultations were underway and a public consultation paper on token mapping will be released soon.
Urgent need for consumer protections
Those reluctant to invest in the cryptocurrency industry cite intense volatility, reluctant real-world adoption and high-risk exposure issues as rationale for their hesitancy.
The Australian Securities & Investments Commission (ASIC) doesn’t recognise cryptocurrencies as financial products and therefore have little to no capacity to protect investors against oft-encountered pitfalls such fraud and scams.
More than half of all financial losses to scams that occurred during the first four months of this year were attributed to investment scams involving cryptocurrency, according to the Australian Competition and Consumer Commission’s (ACCC) Scamwatch.
Prices plunged this year, compelling market analysts to declare a “crypto winter”. Despite this latest downturn, digital currency markets remain popular and continue to attract new investors.
The Australian Taxation Office (ATO) estimates that more than one million taxpayers have interacted in some way with the largely unregulated crypto asset ecosystem since 2018.
Australia’s big four banks have varying views when it comes to the advancement of the cryptocurrency industry and their level of participation.
The U.S. Treasury Department published a fact sheet earlier this month mapping out ways the government can work with foreign regulators to address risks and harness potential benefits of digital assets and blockchain technology.
If you’re sceptical or unsure about buying in, you might find our cryptocurrency guide useful. Perhaps you’re interested in assets other than Bitcoin? Consider these six alternative cryptocurrencies.
Not interested in cryptocurrency investment? How about the nouveau market for cryptoart?
Before investing in cryptocurrencies, equities, or any other assets, it may be sensible to seek financial advice to determine the best options for your financial situation and goals.
Disclaimer
This article is over two years old, last updated on August 23, 2022. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent cryptocurrency articles.
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Product database updated 23 Nov, 2024
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