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Australian Crypto Execs Wary of Implications of Crypto Regulation

• Australian crypto executives have warned of the implications of classifying all cryptocurrencies as financial products under the law.
• Stephen Jones, the Assistant Treasurer and Minister of Financial Services, commented on the country’s regulatory framework on digital assets in an interview with the Sydney Morning Herald.
• Jones mentioned that the government is not keen on structuring an entirely new set of rules for crypto, which fundamentally shares the same characteristics as a financial product.

The crypto industry in Australia has recently been thrown into turmoil as Stephen Jones, the Assistant Treasurer and Minister of Financial Services, commented on the country’s regulatory framework on digital assets in an interview with the Sydney Morning Herald on January 22. Jones stated that he did not want to pre-judge the outcomes of the consultation process that the government was about to embark on. He further mentioned that if a digital asset looks like a duck, walks like a duck, and sounds like a duck, then it should be treated like one.

This statement has caused many crypto executives in Australia to sound the alarm regarding the implications of classifying all cryptocurrencies as financial products under the law. They fear that this may lead to increased regulation and oversight of the crypto industry, which could have a detrimental effect on the development and growth of the industry.

In response to the statement, a crypto executive admitted the government was on the path to introducing ‚token mapping‘ which will be necessary as a part of an effort to bring in legislation to regulate the digital asset sector later in 2023. ‚Token mapping‘ is expected to be the first step to regulating crypto assets. This would be followed by a consultation process within the industry, as mentioned by Jones.

While the government is open to the idea of regulating crypto assets, Jones clarified that the government is not keen on structuring an entirely new set of rules for crypto, which fundamentally shares the same characteristics as a financial product. He believes that if a digital asset looks like a duck, walks like a duck, and sounds like a duck, then it should be treated like one.

The Australian crypto industry is now at a crossroads as the government is expected to introduce ‚token mapping‘ and consult with the industry to decide on the best way to regulate digital assets. While the government is open to the idea of regulating crypto assets, many crypto executives are wary of the implications of classifying all cryptocurrencies as financial products under the law. How the government will ultimately decide to regulate the crypto industry remains to be seen.