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After facing a series of delays, Australia’s bill on digital asset market regulation has now been rejected by the Committee on Economic Legislation.
The cryptocurrency bill introduced by Senator Andrew Bragg has finally received feedback, but not the type legislators were hoping for. Australia’s Senate Committee on Economic Legislation shared its thoughts on the proposed “Digital Assets (Market Regulation) Bill 2023,” recommending the bill not be passed by the Senate and suggesting the government conduct further research on digital asset market regulation.
Crypto Assets are “Technically Complex”
In its thoughts, the Committee commented:
“However, crypto assets can be technically complex, difficult to store in custody safely and highly price volatile. Between November 2022 and January 2023, the global market capitalisation of crypto assets declined 63 per cent from AU $4.1 trillion to AU $1.5 trillion.20 Declines in asset prices, combined with poor business practices, has resulted in several high-profile collapses in the crypto ecosystem. Scams also remain a key challenge for the crypto industry.”
The Committee further outlined the “key risks relating to crypto assets,” as the Department of Treasury reported. According to the Treasury, the risks relating to crypto assets are the potential for:
- Financial losses to consumers from engaging in the crypto ecosystem;
- financial risk to traditional firms engaging with the crypto ecosystem;
- and financial risk from the mainstream adoption of novel products that may turn out to be riskier than their traditional counterparts.”
The draft bill has faced several delays. Senator Andrew Bragg initially introduced it in late March 2023. Australia said it would introduce regulation for crypto services providers by early 2023 but then delayed crypto regulation to 2024 in order to gain a complete picture of the industry.
With support from Senator Dean Smith, Senator Bragg published a report offering a more supporting view of the bill, according to reports by Cointelegraph. The Senators suggested the bill be passed with minor amendments, including removing NFTs from the definition of regulated digital assets. The Senators further urge the Board of Taxation to revise its treatment of tax levied on digital assets and transactions within the country and should introduce legislation by early 2024.
In their dissenting report, the Senators said:
“The committee inquiry has demonstrated that the government’s approach to digital asset regulation is hurting Australian consumers and investment.”
The bill is the “first serious step towards implementing a comprehensive digital asset regulatory framework.”
They further opined:
“The government has junked the ambitious crypto agenda of the former liberal government, and Australians will pay the price.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice