According to local media reports, Philip Lowe, a governor at the Reserve Bank of Australia, has recently made a request towards the government for more power to regulate the cryptocurrency market. Lowe also recommended the government take further steps to control the burgeoning crypto industry, adopting a plan to monitor the payment system all around Australia.
“The nature of money changes with technology and technology is quickly changing”, Lowe stated.
In last December’s treasury review, Treasurer Josh Frydenberg had emphasized that by mid 2022, there will be a complete licensing framework for crypto platforms in Australia. This new framework is supposed to “replace the current one-size-fits-all payment licensing arrangements with a functionality based framework adopting graduated, risk-based regulatory requirements.”
With the rapid development of crypto, it should not be a surprise when new fintech entrants are now turning into crypto service providers. And with the way crypto is transforming the traditional banking industry, it is also understandable that regulators all over the world are calling for new approaches to keep up with the technology.
“We need that plan, and it needs to be good. It needs wide buy-in. There are also important pieces of legislation that will need to be passed to make sure that Australia is well-placed for the innovations of the future.”, says Dr. Lowe.
Regulators have also asked for a response from the government regarding the “stablecoins” plans that the Council of Financial Regulators had put forth. Governor Lowe, in one of his earlier speech, had given investors warnings about the high risks of investing in crypto, with stablecoins being no exception.
He pointed out that if privately issued stablecoins are our future, then it is of utmost importance that they meet very high standards: “Council of Financial Regulators is continuing to review the regulatory treatment of different types of crypto-assets.”
It’s time for reforms
Meanwhile, Jim Chalmers – Shadow Treasurer – says that the current system “lacks coherent oversight to address the complexity of issues and the pace of frequent innovation in the sector.” Chalmers believes that reforms will be “empowering regulators and facilitating regulation that is as agile as the sector itself.”
In fact, this is not the first time the topic of a crypto framework is brought up. October 2021, the Senate released a report proposing an implementation of a crypto framework model. According to this report, powers will be in the hands of the Treasury to control crypto exchanges, or financial markets license-holders.
Joe Longo, the ASIC chairman, thinks that the government should implement these recommendations by lawyer Scott Farrell and the Senate committee chair Andrew Bragg as soon as possible for it is an urgent matter. He noted, “In the short time I have been chair, I have been surprised how quickly this phenomenon has grown and has assumed a lot more of my time than I suspected before I started.”
Crypto platforms are not the only target of these regulations. Tech giants like Facebook and Apple may also be scrutinized under the new guidelines.
