Australia’s 2023 crypto bill has been rejected by the Senate Committee on Economics Legislation. The committee provided feedback to opposition Senator Andrew Bragg, who drafted the bill earlier this year.
Published on 4 September, the committee’s report on the bill recommended that it should not be passed and more research is needed.
It claimed there was lacking detail in the proposed regulation and it is “at odds” with the industry approach.
In response, Bragg published a dissenting report, stating that this could have “major consequences” for the Australian market. He suggested instead that the Senate pass the bill with minor adjustments, for example redefining stablecoins and excluding non-fungible tokens (NFTs).
New guidance on Australia’s crypto bill
The Digital Assets (Market Regulation) Bill 2023 was introduced in March by Braggs. Set out in the bill were regulatory recommendations for stablecoins, custody requirements, and licenses for exchanges.
But the new report said: “The committee is of the view that the bill is at odds with the measured and industry accepted approach the government is undertaking to ensure that current and new regulations are well considered and effective in supporting consumers and the digital assets industry.”
It did note the increased growth in the digital asset industry, which would improve in the “right regulatory settings”.
However, the report said the bill lacked the detail and certainty needed by the industry.
It added that there was a “genuine concern for regulatory arbitrage and adverse outcomes to the industry.”
The committee especially noted the complexities in crypto licenses, which it claims is not supported by the industry and is not practical.
Moving forwards, more consultations on the bill were recommended. This is said to ensure that any digital asset regulation is in light of industry best practices and informed by crypto experts.
Dissenting report on the Australia crypto bill
Senator Bragg published a dissenting report, disagreeing with the committee’s findings. The lawmaker saw the appeal of digital assets, saying they “provide better options for Australian consumers with cheaper prices, provided the market is fitted with the proper safeguards”.
Bragg said the committee was proposing going back to the starting block by holding more constultations, which he claims would have “major consequences for the Australian market”.
“First, it has left consumers exposed to the risks of an unregulated market. Second, it has driven investment offshore.”
Bragg said that a “Australian crypto bill is entirely viable”. He suggested that the Senate should now debate the bill and pass it.
While the committee commended the Australian Government’s role in crypto regulation, Bragg said the market is still waiting on them to act and regulatory guidance should be provided now.
“Labor’s approach will damage existing and new investments designed to bring competition to Australia. The failure to legislate is driving investment offshore.”
Next crypto steps for Australia
The Australian Government is currently involved in various different crypto consultations and pilots. Recently, the country has taken on a token mapping exercise, a programme to build crypto knowledge that would inform future policies.
Meanwhile, the committee noted that “further consultation on digital assets licensing and custody requirements is anticipated in the coming weeks”.
