On Friday, the Australian government distributed a consultation document on token mapping, and it is due March 3rd for comments from stakeholders.
The decision was made public in August 2022, around three months after Prime Minister Anthony Albanese’s new government assumed office. The incoming administration promised a more serious effort to sort out what is in the ecosystem and what hazards need to be looked at first.
According to the paper, “token mapping” is “the process of defining the essential activities and functionalities of products in the crypto sector and mapping them against current legal frameworks.
Consultation open! Today we released the token mapping consultation paper. This consultation is part of a multi step reform agenda to develop an appropriate regulatory setting for the #crypto sector. Read paper & submit views @ https://t.co/4W2msjhP9B @ASIC_Connect @AUSTRAC pic.twitter.com/OGHuZEGvDp
— Australian Treasury (@Treasury_AU) February 2, 2023
Since the FTX exchange’s collapse in 2022, Australia has been in damage control mode. After failing to act on its concerns over Sam Bankman-Fried’s firm, the government has begun cracking down on several other businesses. To increase crypto security, a licensing and regulatory framework will be imposed on crypto service providers this year.
Angela Ang, the senior policy adviser at TRM Labs, said that Australia’s token mapping exercise is the first of its kind by a national government, going back to first principles to understand crypto and map it to an existing regulatory framework. However, as Ang pointed out, the most intriguing aspect was how Australia would deal with decentralised finance (DeFi).
Plans for crypto regulation were also outlined in the token mapping consultation document.
After the token mapping, licensing and custody reforms is the natural next step for crypto reforms in Australia. Thus, in mid-2023, a separate consultation document proposing a licensing and custody framework for crypto asset service providers will be made public.
The goal is to establish reasonable expectations for the security measures taken by crypto asset service providers on behalf of their consumers.
Midway through 2023, the government plans to publish a consultation paper on crypto assets to solicit public opinion on the government’s role in crypto regulation, prospective investor protections, and fraud prevention. It is expected that at least two big Australian banks will launch a stablecoin this year, and the country expects to finish its CBDC trial by the end of the year.
