In an interview on January 22, the Australian Minister for Financial Services said there was a “good argument” for treating crypto as financial products.
After recent comments from Australia’s assistant treasurer, Australian crypto executives have warned against putting all digital assets in the same boat as financial products.
Assistant Treasurer and Minister for Financial Services Stephen Jones talked to the Sydney Morning Herald on January 22 about the state of crypto regulation in the country.
He said that the government was still on track with its “token mapping” plan to figure out which crypto assets to regulate this year. A crypto exchange executive said that a consultation process with the industry would “start soon.”
On the other hand, Jones said he wasn’t “that interested” in making a whole new set of rules for something he thinks is a financial product.
“I don’t want to guess how the consultation process we’re about to start will turn out. But I think it should be treated like a duck if it looks like a duck, walks like a duck, and sounds like a duck,” Jones said.
“Other coins or tokens are mostly used as a place to store money for investment and speculation. There is a strong case for treating them like financial products.”
SMH says that the Australian Securities and Investments Commission (ASIC) and Commonwealth Bank, one of Australia’s “Big 4” banks, favor regulating cryptocurrencies as financial products.
Crypto CEOs warn of a “broad” approach.
But people in the crypto market have warned against taking a broad view of crypto assets.
Partner at Piper Alderman and blockchain and digital asset lawyer Michael Bacina said, “a broad approach of classifying a technology as a financial product without a clear and usable path to licensing and compliance will likely send even more crypto businesses offshore and create more risk.”
Adam Percy, the General Counsel for Swyftx, said in statements to Cointelegraph:
“The trick is to protect consumers without shutting down well-run digital asset businesses in the United States and forcing people to use exchanges in other countries where checks and balances are less strict.”
Holger Arians, CEO of Banxa, a company that helps people get started with crypto, said that too much regulation could “seriously hurt” Australia’s role as a leader in crypto.
Caroline Bowler, CEO of the Australian crypto exchange BTCMarkets, also warned against a “too prescriptive” approach to regulation.
“This may put our digital economy on the back foot, in time, smothering our international competitiveness.”
Australian financial regulators still need to set up their regulatory framework officially. Still, after the FTX meltdown in November, politicians in Australia and around the world have seen a greater need for action.
Jones said that the FTX collapse “puts beyond doubt” the need for crypto regulation.
In September, Australian crypto entrepreneur and investor Fred Schebesta warned that rushing the token mapping could be bad for the industry.
The details of token mapping are not precise, and Australia’s “fledgling” crypto industry needs to “align with the other major markets and their regulations,” he said.
The crypto lobby group Blockchain Australia agreed, arguing that if all crypto assets were treated as financial products, it would hurt investment and innovation in the crypto sector and lead to the loss of jobs in the industry.
