Australian crypto bill rejected! Senate recommends further study of digital asset regulatory legislation

The Australian digital asset market regulatory bill has recently faced multiple delays, and currently, the Australian Senate Economics Legislation Committee has recommended against passing the bill due to the rough nature of the cryptocurrency-specific legislation.

Australian Cryptocurrency Regulation Bill Aims to Protect and Foster Investors

The bill, known as the "2023 Digital Assets (Market Regulation) Bill," proposed by Senator Andrew Bragg, aims to protect consumers and promote investors. The draft primarily provides regulatory suggestions for stablecoins and specifies licensing and custody requirements for exchanges.

Senate Rejects Passage: Further Study Recommended

On September 4, the committee provided official feedback on the draft, recommending that the Senate not pass it and encouraging the government to further study the relevant topics. Reasons for rejection include:

• The committee expressed concerns about the lack of detail and certainty in the bill, emphasizing the importance for investors, consumers, and the industry to have this information.
• The bill did not effectively interact with existing regulations.
• The committee stressed the importance of ensuring consistency in digital asset regulation with international standards. Many participants in the inquiry expressed concerns about the definitions proposed in the bill and believed that delegating important details to subordinate legislation without submission for consideration alongside the bill was problematic.
• The committee believed that the bill contradicted the government's accepted approach of ensuring regulations are carefully considered and effectively support consumers and the digital asset industry.

In conclusion, while the committee acknowledged the potential benefits in the digital assets space and the need for regulation, they raised significant concerns about the specific content of the bill, lack of details, and alignment with international standards. This may be one of the reasons the Senate did not pass the bill.

Supporters' Views: Suggest Minor Amendments Could Suffice

However, Senators Bragg and Dean Smith took a more supportive stance on the bill in a dissenting report, suggesting minor amendments such as removing non-fungible tokens (NFTs) from the regulated digital asset definition. Additionally, Bragg and Smith urged the Australian Taxation Office to review tax policies related to digital assets and transactions, with plans to propose new legislation in early 2024. It is worth noting that while the Senate committee initially planned to provide the bill report on August 2, the report date was postponed several times, ultimately confirmed for September 4.

Should a Cryptocurrency-Specific Law Be Established?

Currently, countries like Japan, Singapore, Hong Kong, and Thailand have cryptocurrency-specific laws, with the EU planning the MiCA regulation, the United States regulating under existing laws, and China implementing a comprehensive ban.

In countries with specific laws, many existing exchange businesses are restricted and require licenses, along with clear tax regulations. Operators under such frameworks have a better understanding of compliance boundaries and consequently engage in fewer business activities.

The U.S. interprets existing laws and enforces them on a case-by-case basis, causing challenges for many operators. SEC enforcement on entities such as NFTs, Ripple, Coinbase, and Binance.

Taiwan primarily follows anti-money laundering guidelines and relies on industry self-regulation. Interpreting Taiwan's FSC draft guidelines.

Given the various regulatory perspectives worldwide, the impact of establishing cryptocurrency-specific laws on industry development remains to be seen.