Australian executives refute ‘argument’ to treat cryptocurrencies as financial products

Australian cryptocurrency executives have urged caution about lumping all digital assets into the same boat as financial products, following Australian assistant treasurer’s recent comments on the ma

Speaking to the Sydney Morning Herald on Jan. 22, Assistant Treasurer and Financial Services Minister Stephen Jones commented on the state of cryptocurrency regulation in the country.

He confirmed that the government was on track this year with its “token mapping” exercise to determine which cryptocurrencies it regulates, with a consultation process “to begin soon” with the industry, according to an executive at the exchange. cryptocurrencies.

However, Jones said he’s not “all that attracted” to instituting a whole new set of regulations for something he essentially believes is a financial product.

Stephen Jones MP Assistant Treasurer and Minister for Finance. Source: Australian Labor Party website

“I don’t want to prejudge the outcome of the consultation process we are about to undertake. But I take the position that if she looks like a duck, she walks like a duck and she plays like a duck, then she should be treated like one,” Jones said.

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

According to SMH, the Australian Securities and Investments Commission (ASIC) and one of Australia’s “Big 4” banks, Commonwealth Bank, are also in support of regulating cryptocurrencies as financial products.

Crypto executives warn of “broad” approach.

However, cryptocurrency market participants have urged caution on a wide-ranging approach to crypto assets.

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

Adam Percy, General Counsel at Swyftx, reiterated the sentiment in statements to Cointelegraph, stating:

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

Meanwhile, Holger Arians, CEO of cryptocurrency provider Banxa, shared concerns that excessive regulation could “seriously impact” the pioneering role Australia has played in the cryptocurrency sector.

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

“This could challenge our digital economy, over time, stifling our international competitiveness.”

Australia’s financial regulators have yet to officially formulate their regulatory framework, but in light of the FTX crash in November, Australian policymakers and their global counterparts saw a greater urgency to act.

Jones said the FTX crash “puts beyond any doubt” the need for cryptocurrency regulation.

Related: New Australian government finally signals its stance on cryptocurrency regulation

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

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

Crypto lobby group Blockchain Australia agreed, arguing that if all crypto assets were treated as financial products, it would hurt investment and innovation in the cryptocurrency industry and result in job losses in the industry.