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Financial regulations in Australia are likely to receive an overhaul to improve investor safety in the cryptocurrency market, strengthen the country’s payments system, and allow for competition in the clearing and settlement of equity trades.
According to a blueprint published by the Treasury this week, a framework for the licensing and regulation of crypto service providers will be set up in 2023, after the FTX bankruptcy fiasco in the US raised concern for the overall crypto market. The considerations state that the Australian government will reserve the right to examine which crypto tokens should be brought under the ambit of the finance laws.
Financial regulations in Australia revamped
“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,” Treasurer Jim Chalmers said in a statement, touting the digital age to be a vessel of both ‘opportunity’ and ‘risk’ to finance. To protect consumers, the Australian government is also considering cryptocurrency custody and licensing settings.
The consultation paper published by the Treasury will form the basis of a reformed ‘strategic plan’ to be passed in the first quarter of 2023. This will assess the payments system specifically and address changes in other areas. The government will amend payment system laws to give the Reserve Bank of Australia (RBA) the authority to regulate new and emerging payment systems, such as digital wallet services.
Under the overhaul of the financial regulations in Australia, a regulatory framework for the buy now, pay later (BNPL) sector will also be established, and a new licensing regime for payment providers will address the sector’s needs to remove barriers to entry.
Meanwhile, in cash equities, the proposal is to either allow and regulate more competition in clearing and settlement to rival ASX Ltd. or give the RBA more powers in the event of a crisis. In Australia, the ASX, which has a monopoly on the clearing and settlement of stock trades, is under fire after abandoning a years-long upgrade backed by blockchain technology.
