Australian Senate Committee Proposes Key Amendments to Digital Asset Regulation Bill

The Australian Senate Committee on Economics Legislation has finished examining the “Digital Assets (Market Regulation) Bill 2023,” initially proposed by Senator Andrew Bragg. Released on September 4, the committee’s findings suggest several changes to the initial draft, as a prudent but necessary move towards a more robust regulatory framework for digital assets in Australia.

A key change suggested was the redefinition of what constitutes regulated digital assets. The committee advised removing non-fungible tokens (NFTs) from this classification, highlighting the fundamental differences between NFTs and cryptocurrencies like Bitcoin and Ethereum.

The committee also offered guidance on how stablecoins should be categorized. Specifically, they recommended excluding asset-backed tokens like Gold and Silver Standard and the BetaCarbon Token from being defined as stablecoins due to their unique risk factors compared to typical stablecoins tied to fiat currency.

Another suggestion was to prolong the transition time for the new rules from three to nine months, giving stakeholders more time to adjust to the updated regulations. Additionally, the committee called for a detailed review of tax considerations related to digital assets, aiming to introduce relevant tax laws by early 2024.

On the issue of debunking, where crypto businesses are denied access to traditional banking services, the committee advocated for the complete adoption of recommendations set out by the Council of Financial Regulators. The committee expressed concerns that debunking could force the crypto sector to operate in less transparent ways, a risk acknowledged by the Australian Department of the Treasury.

The committee pointed out that insufficient regulation has had a negative effect on Australian consumers and investment in digital assets. The Senate views Senator Bragg’s proposed bill as the first meaningful initiative to regulate digital assets in Australia, noting that previous government efforts had been abandoned.

Though originally slated to publish its findings by August 2, the committee extended its deadline multiple times, indicating a meticulous and cautious approach to this complex issue.

By proposing these changes, the committee aims to strike a balance between consumer safety and innovation, laying the groundwork for a safer and more regulated digital asset environment in Australia.

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