Australian Senate Committee Rejects Landmark Crypto Bill

The Australian Senate Economics Legislation Committee has recommended against passing the Digital Assets (Market Regulation) Bill 2023, introduced by opposition Senator Andrew Bragg.

The bill aimed to establish a comprehensive framework for digital assets, including regulations for stablecoins, licensing requirements for exchanges, and custody rules.

However, the committee's report, released on September 4, advises that the bill should not be passed, suggesting instead that the government continues researching digital asset regulation in Australia.

In a dissenting report, Senators Bragg and Dean Smith expressed their support for the bill with some minor amendments. They recommended removing nonfungible tokens (NFTs) from the definition of regulated digital assets and excluding specific asset-based tokens, such as the Gold and Silver Standard and the BetaCarbon Token, from the stablecoin category. They also proposed extending the transition period from three to nine months.

Furthermore, the dissenting lawmakers called for a review of the tax treatment of digital assets and transactions in Australia, with the goal of introducing related legislation in early 2024. They emphasised the need for a structured approach to digital asset regulation and tax treatment to ensure the protection of consumers and the growth of the digital asset industry.

Bill rejection sparks discussion on regulation

The committee's decision has sparked a debate about the future of crypto regulation in Australia. Senator Bragg criticised the Labor government for "putting regulating crypto in the slow lane," expressing concern that the government's inaction has left consumers exposed to the risks of an unregulated market and driven investment offshore.

The majority report from the committee argued that the bill lacked the necessary detail and certainty required for a clear regulatory framework. It also noted that the bill was not congruent with international regulatory regimes, raising concerns about potential regulatory arbitrage and adverse outcomes for the industry.

The debate surrounding the Digital Assets (Market Regulation) Bill 2023 highlights the challenges and complexities of regulating the rapidly evolving cryptocurrency and digital asset space in Australia. It remains to be seen how the government will proceed with digital asset regulation in the country, as the industry and stakeholders continue to seek clarity and certainty in this emerging sector.