Australia’s leading blockchain industry organization said the country’s legal framework for cryptocurrencies doesn’t match the needs of the industry. Especially when it comes to derivatives trading.
So, Blockchain Australia has developed an extensive list of recommendations for the government regarding the regulation of the crypto industry.
According to a statement from Blockchain Australia, the organization has approached the Australian Senate Technology and Financial Development Committee with three main recommendations. This is in response to the committee’s request for input from industry members; on how to improve Australia’s position as a “technology and financial” center.
“The authorities need to carefully develop the legislative framework and implement it in stages… The government and regulators must provide crypto companies with a safe haven. Before the relevant legislation adopted”, the association stressed.
Earlier, New South Wales Senator Andrew Bragg also called for a “right” regulatory framework. To maintain the country’s competitive advantage and consumer protection.
Blockchain Australia, in turn, is calling for a “coordinated and phased approach” to regulating cryptoassets. Recommendations include immediate implementation of safe harbor provisions for cryptocurrency service providers; issuing guidance for cryptocurrency firms in the short term; and overseeing the creation of an “appropriate legal framework” in the long term.
“A phased and measured approach to regulation requires consultation. The presented material describes in detail the pace of development of the industry around the world. If Australia does not start discussing cryptocurrency regulation, it will lose the opportunity to set the direction of this discussion among global regulators”, said Steve Vallas, CEO of Blockchain Australia.
Australian regulators collect information before submitting a recommendation report
According to the guidelines, the first step should be to establish a time frame for suppliers before the entry into force of the guidance or legislation. Within which companies should bring their work in line with the new requirements. The document states that “any regulation should provide for an appropriate transition period and not be applied retrospectively”.
A “new licensing regime, modeled after Australia’s financial services license” needs to be implemented to enable industry participants to provide financial advice on cryptocurrency. Cryptocurrency derivatives under current licensing laws are “fundamentally different” from traditional derivatives. And “the Australian regulatory framework does not address such products”.
Blockchain Australia argues that continuous disclosure rules regarding statements that could affect the price of cryptoassets, custody services, clearing and settlement, and trading stops are inappropriate for the cryptocurrency derivatives market. So, the Senate committee continues to gather information before submitting a final report with additional recommendations in October.
In April, blockchain associations from Australia, Singapore, Malaysia, Thailand, Indonesia and the Philippines formed the ASEAN Blockchain Consortium (ABC) to develop cryptocurrency projects.
According to a survey by Bitcoin exchange Kraken, one in five Australians considered investing in Bitcoin more profitable than traditional savings. A different opinion was expressed by billionaire Hamish Douglas. So, he called digital assets one of the “greatest mass delusions in modern history”.
As a reminder, in June, ASIC saw a threat in exchange-traded funds based on the first cryptocurrency for consumers and markets.