Australia Proposes New Licensing Regime for Crypto Exchanges, Aims for Draft Legislation by 2024

Australia expects to release a draft legislation which covers licensing and custody rules for crypto asset providers by 2024, and once the legislation becomes law, exchanges will have 12 months to transition to the new regime, Australia's Treasury announced on Monday. The timeline indicates it could take till 2025 for an Australian digital asset platform to receive a licence under the freshly proposed regime.

Still, the developments are some of the most significant steps taken by Australia's government towards framing crypto regulation. The proposal was expected by mid-2023 after being first announced in February 2023. The delayed October consultation paper is separate from an earlier token mapping consultation paper. Token mapping is the process of identifying the key activities and functions of crypto products and mapping them against existing regulatory frameworks.The proposal's publication coincided with a speech by Australia's Assistant Treasurer and Minister for Financial Services Stephen Jones at The Australian Financial Review Crypto Summit (AFRCM). Details of what the proposal would entail were first reported by AFR.

“Australia has been waiting for certainty over digital asset regulation so it can seek to catch up with the rest of the world," Michael Bacina, digital asset lawyer at Piper Alderman and Chair of Blockchain Australia told CoinDesk from the Summit. "The approach is consumer-protection centric, with a broad net set to capture many business models not currently regulated. NFT marketplaces holding customer assets could also require licensing."Additionally, the Treasury and Reserve Bank of Australia will publish a "joint report around the middle of 2024 that will provide a stocktake on central bank digital currency (CBDC) research in Australia and set out a roadmap for future work," said Dr Brad Jones, Assistant Governor (Financial System) at the Reserve Bank of Australia in a speech.