Senator Andrew Bragg, the author of the Digital Assets (Market Regulation) Bill, has warned about the consequences if the Australian Parliament rejects the proposed legislation. Bragg expressed concerns that Australian investors would be left vulnerable to unregulated markets and that investments might flee the country.
The Senate Committee on Economics Legislation, on September 4, recommended that the Parliament reject Senator Bragg’s bill. Instead, they suggested that the government continue consulting with the cryptocurrency industry to develop comprehensive regulations.
Senator Jess Walsh, Chair of the Committee and a member of the Labor Party explained the committee’s stance in a report. The report stated that the bill failed to align with the existing regulatory framework, raising concerns about potential regulatory arbitrage and negative impacts on the industry.
In comments sent to Cointelegraph via email, Senator Bragg criticised the committee’s recommendation, emphasising that it would expose consumers to unregulated markets and lead to offshore investment.
Bragg argued that digital asset regulations offer dual benefits: consumer protection and market investment and activity promotion. He pointed out that these regulations were initially proposed by the former Liberal government in October 2021.
Senator Bragg perceived the rejection of his bill as driven by partisan politics due to the presence of Labor Party members on the Senate Committee. He criticised their decision, claiming it had stalled the implementation of digital asset regulations in Australia.
Despite Bragg’s assessment of the situation, Liam Hennessey, a partner at the international law firm Clyde & Co., suggested that the rejection was more related to a separate regulatory process—the Treasury’s consultation paper on the government’s “token mapping” exercise. Hennessey maintained that rejecting Bragg’s draft bill neither significantly hindered nor aided cryptocurrency regulation in Australia.
Hennessey explained that Senator Bragg’s bill and the feedback it received from the industry will undoubtedly be taken into consideration. The Senate is currently dealing with a broad array of legislation, so the delay should not be overanalyzed.
He concluded that Bragg’s bill and the effort put into it would contribute to informing the government’s approach to cryptocurrency regulation.
The Labor government announced a token mapping exercise in August, using the Treasury to determine how crypto assets and related services should be regulated, guiding future regulatory decisions. On February 3, the Treasury released a public consultation paper on this exercise, positioning it as a foundational step in regulating the digital asset market.
However, there has been limited government discourse on digital assets and their regulation since then.
Senator Bragg introduced the Digital Assets (Market Regulation) Bill in March 2023 intending to safeguard consumers and foster investor confidence. The bill contains recommendations for regulating stablecoins, licensing exchanges, and establishing custody requirements. It is currently awaiting a vote in the Senate during the next session.