The Australian government plans to unveil legislation by 2024 requiring cryptocurrency exchanges operating in the country to obtain mandatory licensing from the Australian Securities and Investments Commission (ASIC).
According to an October 16th announcement from Australia’s Treasury department, exchanges will have a 12-month transition period to comply once the new rules are enacted, meaning formal oversight could begin by mid-2025.
Long-Awaited Regulatory Clarity
The proposal marks a major step toward establishing clear federal regulation of crypto exchanges after years of ambiguous policy.
Mandatory ASIC licensing will formally define exchanges’ regulatory responsibilities when serving Australian customers.
Specific requirements being considered include requiring approval if platforms hold over $946 in client assets or $3.15 million in total assets.
Multi-Year Policy Process
While initially proposed in February 2023, the legislation was delayed until being opened for public feedback this month.
The Treasury is accepting comments until December 1st before finalizing the bill for parliamentary introduction in 2024.
Navigating Risks While Encouraging Innovation
The scope of the planned licensing rules aims to balance crypto innovation opportunities with managing risks as adoption accelerates across Australia.
But questions remain around potential impact on smaller platforms.
By taking a measured approach, Australian officials hope to craft sensible oversight – not stifling crypto’s potential but adequately protecting consumers.
The lengthy roadmap illustrates the nuanced balancing act faced by regulators worldwide as virtual assets integrate into mainstream finance.
