Australian Authorities Develop Guidelines for Regulation

A roadmap and guidelines have been set in motion by The Australian Prudential Regulation Authority (APRA). Neither this post nor any other on cryptofal.com should be taken as financial advice. It is not.

Since crypto is still a new space there are not many things set in place to regulate it. Some people may not like that the space is being regulated as it takes away from the “decentralized” nature of crypto. We have seen time and time again where people get scammed for large sums of money and that is the group of people that would benefit most from increased regulations. The only issue is that there is no country that has set the precedent for what a crypto regulatory framework would look like.

Many countries, including the US, are working to get something put together for businesses dealing with crypto within the next year. The Australian Prudential Regulation Authority (APRA) has just put out its initial risk management expectations for regulated companies that are dealing with crypto. The current roadmap provided plans for introducing operational risk standards by 2024.

By 2025, they are aiming at having requirements for crypto assets in general and stored value facility standards. As we can see, this is a bit of a way out still, but they are taking the time to make sure what they are doing is right. Something like this cannot be rushed, especially when it is probably new to most of the people who are making the framework.

Australia has been one of the most rapidly growing countries in terms of cryptocurrency adoption. According to the Australian Taxation Office, more than 800,000 Australian taxpayers transacted in digital assets over the last three years, with an increase of 63% in 2021 over the previous year. This also makes it a popular destination for companies to start their crypto operations within Australia. Popular US crypto exchange, FTX, has announced plans earlier this month that it was going to set up a shop in Australia. This coupled with the fact that four ETF issuers in the country have agreed to cover the margin requirements to list crypto-related products.

There are a lot of ways that this can work for different countries it will just come down to who does it first. The one who does it first will basically be laying the baseline for every country that follows terms of regulatory guidelines. There is no need to fear regulation as it is put in place to protect investors. Yes, it is also an extra way to put tax dollars but that is the same for everything. This can only benefit all existing and future crypto holders.

“Many commentators have called for us to shoehorn crypto into the financial products regime. But crypto-assets do not require the government to assure trust in the same way that financial products do…The Morrison Government wants to make sure that consumers can trust the exchanges they use to buy crypto,” the minister for superannuation, financial services, and the digital economy, Jane Hume, said last month at Australian Blockchain Week 2022.

“The Government will not be protecting consumers from market volatility. But Australian investors will be sure that if they use a licensed Australian exchange, they can trust that exchange to deliver on its commitments to its customers, and have appropriate protections.”