- Stephen Jones announced that digital assets would be identified as financial products.
- Australia’s new crypto regulations could impact the country’s crypto investment.
- Australia uses FTX collapse as an example for reasons to enforce crypto regulations.
Crypto executives have been vocal after the recent decision of the Australian Assistant Treasurer and Minister for Financial Services, Stephen Jones, to categorize digital assets into financial products.
In an interview published by the Sydney Morning Herald on January 22, Stephen Jones, the assistant treasurer, gave an overview of the current status of crypto regulation in Australia, explaining the need for crypto regulation in the country after the unexpected and devastating incident that occurred last year November with Bahamas-based crypto exchange, FTX.
Jones believed that crypto regulation was an important matter to be solved in 2023. Fortunately, the Australian government would launch its “token mapping” exercise to determine what crypto assets needed to be regulated.
Citing the crash of FTX, Jones mentioned that the FTX situation and its impact on the crypto market “put beyond doubt” the necessity for crypto regulation. According to the Assistant Treasurer, the government focused on unregulated crypto assets like financial products.
“I start from the position that if it looks like a duck, walks like a duck, and sounds like a duck, then it should be treated as one,” Jones said to SMH.
The government official stated that he should have entertained the idea of setting up new regulations for crypto assets similar to financial products hence why it would be suitable to categorize them as such.
This news sparked a fire in the hearts of the crypto executives and the crypto community at large, explaining to Stephen Jones the consequences that could occur in the crypto community if all digital assets became identified as financial products.
According to the Sydney Morning Herald, those supporting the decision to regulate crypto assets as financial products are the Australian Securities and Investments Commission (ASIC) and one of the country’s big four banks, Commonwealth Bank.
“Other coins or tokens are essentially used as a store of value for investment and speculation. [There is a] good argument that they should be treated like a financial product,” Stephen Jones added.
The Assistant Treasurer and Minister for Financial Services further stated that Bitcoin (BTC) was seeking to “replicate or replace” traditional currency methods; however, this was not the primary reason it should be made into a financial product.
Crypto executives react to the financial product news
The crypto community has been outspoken about Australia’s approach toward making digital assets into financial products, as a few influential voices and organizations have been vocal about their thoughts on the issue.
The country’s crypto lobby group, Blockchain Australia, expressed its feeling against the approach to the federal treasury in 2022. It insisted that all crypto assets were treated like financial products, which would affect crypto investments in the sector and cause the loss of crypto-related jobs.
Holger Arians, the CEO of crypto on-ramp provider, Banxa, also expressed his opinion on the over-regulation of cryptocurrencies, saying it could impact the pioneering position of Australia in the crypto industry.
Australian government’s 2023 plans for the crypto industry
After the FTX collapse in November 2022, Australia, one of the pioneering countries to adopt cryptocurrencies, hinted that it would be placing regulations on crypto assets and dealings to protect its citizens from falling prey to cases like Sam Bankman-Fried’s fraudulent acts. One of the Australian government’s plans for crypto includes a transition to the data-sharing regime, also called “open banking.”
Australia also mentioned introducing a mandatory licensing regime for crypto asset exchanges, stablecoin providers, and digital asset custody services. In its bid for the country to protect its people, Australia would be making it mandatory for service providers in the crypto industry to acquire licenses having met the prescribed requirements.
Australia’s “big 4” bank mints stablecoins
Earlier this month, National Australian Bank (NAB) announced that it would be launching its stablecoin (AUDN), making it the second of the country’s four biggest banks to create its stablecoins. Despite the crypto winter, which has caused economic downsizing in the crypto industry, the NAB believed that blockchain technology was the future.
Conclusion
Australian crypto execs disapprove of Assistant Treasurer and Minister of Financial Services Stephen Jones’ statement at the Sydney Morning Herald interview where the government official claimed that crypto assets would likely be categorized as financial products.
