Government officials in Australia have outlined plans to introduce new regulations centred around cryptocurrency licensing and custody asset management next year.
The Australian Treasury announced this via a proposal paper aiming to formulate and draw out plans to further regulate its crypto market, with draft legislation being slated for 2024.
The paper proposes a new framework on licensing for crypto companies, based in or coming into the country, to apply to gain clearance, with a 12 month transition time period in place for companies to make the transition.
Furthermore, due to the reforms to crypto regulations, it may take until 2025 for companies to receive clearance by Australian authorities.
The paper reveals: “The Government proposes that the business of holding significant values of digital assets, or assets backing digital assets, should be a regulated activity.
“Under the regulatory model outlined in this paper, the asset holding arrangements used by digital asset platforms would be regulated as a new ‘digital asset facility’.
“These arrangements would have to meet the minimum standards that apply to existing financial products and services that involve an asset holding arrangement.”
Further details of the proposals indicate that all crypto companies that hold more than AUD 1,500 or more than AUD 5 million in total assets would require a licence from the Australian Financial Services licence.
“In some cases, it can be difficult to determine whether a person is ‘holding’ a digital asset. They may be stored in ways that permit multiple parties to access them, programmed to be accessible when certain conditions are met, or subject to other forms of technical encumbrance,” the paper states.
“The proposed framework would leverage broad concepts around ‘control’ to identify the holding arrangements to bring within the regulatory perimeter. For example, businesses with the ability to exercise, coordinate, or direct ‘factual control’ over the assets in a real and immediate sense.”
Proposals for the revamped crypto framework were initially pencilled for the midway point of 2023 since its announcement in February of the same year.