Australia will regulate cryptocurrencies using ‘token mapping’
- Treasury will prioritise ‘token mapping’ in 2022 to better control crypto assets and services.
- Token mapping identifies all digital asset tokens in Australia.
- This means tracking the cryptocurrency asset’s type, code, and other technical features.
Australia’s new government, which has been led by Prime Minister Anthony Albanese since May 23 and was announced by Australian Treasurer Jim Chalmers on Monday, will look at how cryptocurrency assets are managed to keep procedures up-to-date and protect customers.
“Australians are experiencing a digital revolution across all sectors of the economy, but regulation is struggling to keep pace and adapt with the crypto asset sector,” Chalmers said in the statement.
“As the first step in a reform agenda, Treasury will prioritise ‘token mapping’ work in 2022, which will help identify how crypto assets and related services should be regulated. This hasn’t been done anywhere else in the world, so it will make Australia a leader in this work.”
According to the Sydney Morning Herald, token mapping is the process of figuring out the features of all digital asset tokens in Australia.
This means keeping track of the type of crypto asset, its underlying code, and any other tech feature that makes it unique.
Chalmers said, “As it stands, the crypto sector is largely unregulated, and we need to do some work to get the balance right so we can embrace new and innovative technologies while safeguarding consumers.”
“With the increasingly widespread proliferation of crypto assets – to the extent that cryptocurrency advertisements can be seen plastered all over big sporting events – we need to make sure customers engaging with crypto are adequately informed and protected,” the statement said.
Chalmers said that before “token mapping” is finished, the government will give the sector a paper about a regulatory framework to talk about.
“The great Web3 companies of tomorrow need the flexibility to be able to innovate today,” Holger Arians, CEO of Banxa, an Australia-based fiat-to-crypto exchange, told CoinDesk in a text message.
This shows that people are worried that regulations will need to change because the space is changing so quickly.
“While we believe the token mapping exercise is a step in the right direction, we hope to see ongoing close collaboration with our industry so that the appropriate regulatory frameworks can be put in place,” he wrote.
The move seems to have become a political issue because it happened three months after Albanese government beat Scott Morrison’s Labour government.
Chalmer said, “The previous government dabbled in regulating crypto assets, but it jumped too quickly to options before it knew what was being regulated.”
“The Albanese government is taking a more serious approach to work out what is in the ecosystem and what risks need to be looked at first,” Chalmers added.
Chalmers said in the statement that the goal is “the aim will be to identify notable gaps in the regulatory framework, progress work on a licensing framework, review innovative organisational structures, look at custody obligations for third-party custodians of crypto assets and provide additional consumer safeguards.”