Australian leaders refute ‘argument’ to treat crypto as financial products

Australian crypto executives have urged caution about lumping all digital assets in the same boat as financial products, after Australia’s deputy treasurer’s recent comments on the ma

Speaking at the Sydney Morning Herald on January 22, Deputy Treasurer and Minister of Financial Services Stephen Jones commented on the state of crypto regulation in the country.

He confirmed that the government was on track with its “token mapping” exercise this year to determine which crypto assets to regulate, with a consultation process “to begin soon” with the industry, according to an official. crypto exchange.

However, Jones said he’s “not so keen” on bringing in a whole new set of regulations for something he says is essentially a financial product.

Stephen Jones, MP, Deputy Treasurer and Minister for Financial Services. Source: Australian Labor Party website

“I do not want to prejudge the results of the consultation process that we are about to undertake. But I go on the principle that if he looks like a duck, walks like a duck and sounds like a duck, he should be treated like one,” Jones said.

“Other coins or other tokens are basically used as a store of value for investment and speculation. [There is a] good argument for them to be treated as a financial product.

The Australian Securities and Investments Commission (ASIC) and one of Australia’s “Big 4” banks, Commonwealth Bank would also be in favor of regulating crypto as financial products, according to SMH.

Crypto Officials Warn of a ‘Broad’ Approach

However, crypto market participants have urged caution on a holistic approach to crypto assets.

Speaking to Cointelegraph, blockchain and digital asset lawyer and partner at Piper Alderman, Michael Bacina, warned that “a broad approach to classifying a technology as a financial product without a clear and usable path to licensing and compliance will likely send even more crypto businesses overseas.” and create more risk.

Adam Percy, general counsel for Swyftx, echoed the sentiment in statements to Cointelegraph, saying:

“The trick is to protect consumers without regulating well-run domestic digital asset businesses and forcing people to use offshore exchanges that are subject to less stringent checks and balances.”

Meanwhile, Holger Arians, CEO of on-ramp crypto provider Banxa, has raised concerns that over-regulation could “seriously impact” Australia’s pioneering role in the field. of crypto.

Caroline Bowler, CEO of Australian crypto exchange BTCMarkets, also warned against taking an “overly prescriptive approach” to regulation.

“It could put our digital economy on its back, ultimately stifling our international competitiveness.”

Australian financial regulators have yet to formally articulate their regulatory framework, but in light of November’s collapse of the FTX, Australian politicians and their global counterparts have found there is more urgency to act.

Jones said FTX’s collapse “puts beyond doubt” the need for crypto regulation.

Related: Australia’s new government finally signals its stance on crypto regulation

In September, Australian crypto entrepreneur and investor Fred Schebesta warned that the token mapping rush could be problematic for the industry.

The intricacies of token charting are unclear, and Australia’s “nascent” crypto industry needs “to align with other major markets and their regulations,” he added.

Crypto lobby group Blockchain Australia agreed, saying at the time that if all crypto assets were treated as financial products, it would hurt investment and innovation in the crypto industry, and lead to loss. industry-related jobs.