Australian regulators are reportedly preparing a new guidance to require cryptocurrency exchanges to obtain financial services licenses.
Licensing requirements for crypto exchanges in Australia are set to be extended beyond those related to digital currency exchanges, The Australian Financial Review (AFR) reported.
According to Australian Securities and Investments Commission (ASIC) commissioner Alan Kirkland, the new requirements are necessary because the regulator considers that the Corporations Act captures most major crypto assets like Bitcoin (BTC) and Ether (ETH).
The commissioner disclosed the authority’s plans at the AFR Crypto Crypto and Digital Assets summit in Sydney on Sept. 23.
New regulatory guidance to be released in the coming months
The ASIC is preparing to update the Corporations Act’s Information Sheet 225 to provide more clarity on how particular crypto tokens and certain products should be treated from a regulatory perspective, Kirkland reportedly said before his appearance at the event.
ASIC commissioner Alan Kirkland. Source: AFR
“ASIC’s message is that a significant number of crypto-asset firms in the Australian market are likely to need a license under the current law,” Commissioner Kirkland said in a statement to Cointelegraph.
He noted that the ASIC supports responsible innovation in the crypto industry. Still, it remains concerned about the potential for consumer harm and market misconduct, which it wants to address with the regulatory regime.
“ASIC expects to issue updated draft guidance in the coming months, which we will open up to feedback from the industry,” the Commissioner stated, adding:
“ASIC believes that licensing and its subsequent protections will mitigate risk while bolstering consumer confidence and market integrity — two elements that are crucial in encouraging innovation in the financial system.”
Australia “has gone from crypto leader to crypto laggard,” argues Senator Andrew Bragg
The news on ASIC’s looming guidance came amid Senator Andrew Bragg slamming Australian regulators for not taking a proactive approach to regulating the crypto market.
Senator took to X on Sept. 23 to share his address at the AFR event, arguing that Australia “has gone from crypto leader to crypto laggard” in the past two and half years.
In his speech, the Senator mentioned that Australia was anticipated to set up crypto regulation a few years ago when Finance Minister Stephen Jones claimed that the Labor Party’s approach to crypto would focus on “safety and transparency.”
Related: Australia’s central bank launches 3-year program for wholesale CBDC
Senator Bragg said the government “completely abandoned” the 2022 regulatory framework for crypto asset secondary service providers (CASSP) following the election. Instead, Labor re-released the consultation paper after 18 months and hasn’t been vocal about it, the lawmaker noted.
Source: Senator Andrew Bragg
He also predicted that Australia is unlikely to get any crypto regulation forward in the current Parliament term, stating the following:
“Labor will not deliver any crypto legislation in this term of Parliament. Labor has wasted three years by solely focusing on the needs of their close vested interests [...] By locking Australia in the crypto slow lane, Labor has stifled innovation and denied Australians the opportunities to reap the benefits that blockchain provides.”
As previously reported by Cointelegraph, Australia’s Committee on Economics Legislation recommended not to pass Senator Bragg’s crypto regulation bill in early September 2024, citing the need for the government to continue to research the issue.
Introduced in March 2023, the draft bill provided regulatory recommendations for stablecoins, licensing of exchanges and custody requirements.