Australia Will Improve Regulation For Crypto Service Providers In Early 2023

The Australian government stated that sufficient efforts are being taken to increase the regulation of crypto service providers. The government will issue a consultation document in early 2023 to determine which digital assets will be regulated.

To strengthen the safety net in the cryptocurrency field, the Australian government is also considering major revisions to its financial services regulations. The new consultation document will serve as the foundation for Australia’s “strategic plan” for a payments system, which is expected to be enacted in early 2023. Australia’s Treasurer, Jim Chalmers, commented on the development:

“The one constant in finance is change. It’s fast-moving, dynamic and our regulatory frameworks haven’t kept up. Our reforms are about starting to fix that in pursuit of a financial system that is stronger and more secure.”

Regulators around the world are attempting to tighten their hold on digital assets in the aftermath of the FTX exchange’s recent bankruptcy, which showed a serious breakdown in risk management.

Meanwhile, in Australia, the ASX, which has a monopoly on the clearing and settlement of stock trades, is under fire after abandoning a technological update powered by blockchain technology for years.

“The digital age has brought new opportunities and risks to finance. Our plan is about opening up space for further innovation while making sure we have the right regulatory approach in place to keep consumers, businesses and the system safe,” Chalmers said.

The 2022 crypto winter and subsequent occurrences have compelled regulators to tighten regulations in this industry. The spectacular fall of FTX’s crypto empire has revealed serious flaws that must be corrected as quickly as possible. In light of recent events, Australia is attempting to strike a balance between innovation and cryptocurrency regulation.

One of the most serious challenges that crypto consumers face today is a lack of adequate regulation of crypto custodians, crypto lenders, and other service providers. As a result, the Australian government is contemplating cryptocurrency custody and licensing settings to protect consumers.

To protect consumers, the government is also exploring cryptocurrency custody and licensing settings and is scheduled to comment on a framework for that next year before presenting the law.

According to the proposals, a regulatory framework for the so-called purchase now, pay later sector would be established, making it easier for businesses to determine whether or not they require a license.

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