To misquote Mark Twain, it seems that rumours of crypto legislation in Australia any time soon might have been exaggerated. Only a few weeks ago, hopes were high that the token mapping process initiated at the start of February was a first step towards getting a regulatory framework in place in the first half of 2023. However, the latest internal documents released by Australia’s Treasury Department under Freedom of Information rules tell a very different story.
The documents, which were obtained under application by The Australian Financial Review, set forth a timetable that does not inspire confidence of Australia leading the way in developing a regulatory framework – at least, not this year.
Plans for a long consultation process
The Treasury Department is understandably cautious about acting to hastily and the government insists on getting a full picture of the crypto industry before making any decisions. That is logical enough, but the problem is that it is facing a moving target – in the crypto world, today’s news is tomorrow’s fish wrap.
Submissions closed for the token mapping consultation on 03 March, and there was a feeling of excitement to see the next step. That enthusiasm has been somewhat quashed by the stages set forth in the Treasury documents.
The next step is that the government will release consultation papers some time in the second quarter – so by the end of June. There will then be a series of stakeholder roundtable discussions on the subject of crypto licensing and custody throughout the third quarter.
That doesn’t sound so bad, and at least demonstrates a process. However, the less promising notes say that final submissions are not expected till “late in the year.” This certainly means that any firm action will be pushed back into 2024 – and possibly further.
Why it matters – from cappuccinos to casinos
Australia has a global reputation as an early adopter when it comes to new technology. We saw it with smartphones, we’re seeing it with 5G and we’re seeing it with crypto. Well over four million Australians own crypto. That doesn’t sound so huge until you remember just how low Australia’s population density is – it actually reflects about 25 percent of the adult population, significantly more than the USA (15 percent) and the UK (seven percent).
Crypto is gradually seeping into the mainstream in Australia, as the nation abandons cash and even cards in favour of digital payments. But it is not just the thought of buying their artisan cappuccinos with digital money that is getting Australians excited about crypto.
Gambling on pokies, another Australian institution, has also been big news in Australia over the past few months. We won’t go into the details here, but suffice it to say casino gaming has become a political hot potato. The dozens of online casinos serving the Australia market are getting increasingly popular with the Australian gambling public but less so with regulators. Right now, all these online casinos allow punters to gamble with AUD, but that could become problematic if more pressure is brought to bear on Australian banks. Crypto is the obvious solution, and many online betting platforms already accept Bitcoin and Altcoins.
Government is expecting frustration
In a refreshingly transparent statement, the Treasury Department acknowledged that there would be frustration from some quarters over how long it is likely to take to get a regulatory framework in place. Jim Chalmers, the Australian Treasurer wrote that his department “expects some stakeholders to be disappointed with the perceived delay.” He specifically named “consumer groups seeking immediate protections and businesses seeking regulatory legitimacy,” which, in fairness, covers a significant number of said stakeholders.
However, Mr Chalmers believes there is time, and commented that last year’s collapse of FTX caused demand for crypto to “weaken significantly.” In the real world, there is little tangible evidence of this. However, nobody can argue with the contention that it is ultimately better to do this right than to do it fast.