Australian crypto exchanges have applauded the Australian Treasury’s proposals to regulate cryptocurrency exchanges under the existing licensing regulations for financial services. However, these Australian crypto exchanges are cautiously optimistic about the new licensing scheme.

In recent years, the world of cryptocurrencies has experienced explosive growth, with digital assets becoming increasingly mainstream. In Australia, the crypto industry has not been left behind. As the industry continues to expand, regulatory authorities are also stepping up their efforts to ensure that the sector operates within established legal frameworks.

A significant development on this front is the introduction of a new licensing regime for Australian crypto exchanges. This development has stirred cautious optimism within the crypto community, as it holds the potential to bring greater legitimacy and security to the industry.

The New Licensing Scheme Australian Crypto Exchanges

Australian Crypto Exchanges Are Cautiously Optimistic About the New Licensing Scheme

In a consultation paper published on Oct. 16, the Treasury presented a new set of proposed regulations to regulate Australian cryptocurrency exchanges under the current financial services laws. These regulations would also establish a plethora of new rules for all Australian crypto exchanges.

Australian Treasury Assistant Stephen Jones said the new regime was focused on three main areas. They include providing a framework for industry growth and innovation, allowing regulatory certainty to Australian crypto exchanges, and ensuring that common consumers and their assets remain protected. He was speaking at the Australian Financial Reviews Crypto Summit event on October 16.

BTC Markets’ CEO, Caroline Bowler, said that she was glad to have reached a new “key milestone” in the regulatory process. She saw the guidelines as a step in the right direction for the country’s larger crypto sector.

“It’s a great next step for the Australian economy. Digital assets are so clearly the future of financial services. The country must keep pace with our international peers with a robust regulatory framework,” according to Bowler.

In a similar vein, Adrian Przelozny, CEO of Independent Reserve, praised the federal government’s plans to enact tougher regulation and policy change. He said that these fresh proposals might aid in reestablishing trust in the cryptocurrency industry.

“We firmly believe these changes will drive investment, provide certainty to the sector, and ultimately, increase consumer protection.”

Swyftx chief counsel, Adam Percy, concurred with many of the Treasury‘s suggestions. He argued that the main objective should be ensuring that cryptocurrency investors can securely use blockchain technology while also fostering innovation.

Boxing the Australian Crypto Exchanges Sector

Australian Crypto Exchanges Are Cautiously Optimistic About the New Licensing Scheme

However, Jonathon Miller, managing director of Kraken Australia, expressed his concern that the proposed regulations risk packing the cryptocurrency sector into a TradFi-like box.

“Australia is now in the unfortunate situation where our regulation has taken a very long time, so we’re taking the approach of shoehorning cryptocurrency into existing financial services regulation,” said Miller.

Miller acknowledged that the consultation paper was the right move, especially as regards giving crypto businesses doing business in Australia much-needed regulatory stability.

“We’re behind our global peers when it comes to implementing a crypto framework, so I appreciate the need to have something in place locally to provide certainty to platforms like ours,” he added.

Liam Hennessy, a lawyer at Clyde & Co, a multinational legal firm that has been aiding in the consultation process, stated that the Treasury’s latest plan “makes sense” for the Australian crypto industry.

Hennessy argued that the new regulations will enable the country to catch up to other nations that are working harder to regulate cryptocurrency, such as the European Union.

Additionally, he said that the licensing framework for Australian Financial Services can be rather complex. Therefore, Australian crypto exchanges and service providers for digital assets will need to start putting together their applications right now.

In conclusion, the cautious optimism surrounding Australia’s new licensing regime for crypto exchanges underscores the evolving dynamics of the cryptocurrency industry and its relationship with regulation. As the sector matures, the desire for legitimacy, security, and broader acceptance becomes more pronounced.

While the regulatory environment may bring some challenges, it also presents opportunities for the Australian crypto market to flourish. These laws will also help them gain the trust of a broader range of investors. With continued collaboration between industry stakeholders and regulators, the cautious optimism can evolve into a confident stride towards a well-regulated and thriving cryptocurrency ecosystem in Australia.

The industry is on a transformative journey, and the prudent approach to these new regulations may help Australia emerge as a major player in the global crypto world.