Australian legislators have been tearing themselves apart over how to handle crypto for more than 12 months. Now, with the rejection of Opposition Senator Andrew Bragg’s market regulation bill rejected, they are back at Square One. Or are they? It could be that with the bill deemed inappropriate and unworkable, the decision has just become a lot easier. Let’s dig into what’s happened so far, what might happen next and how it all affects Australian crypto spenders and investors.
What happened to that Bill?
Australia seemed to be doing what it does best – grabbing innovative technology by the scruff of its neck, putting a regulatory system in place and getting on with making the best use of it, while the rest of the world dithered.
The problem was that with a Labour majority in the Australian Senate, anything coming out of the office of Liberal Senator Andrew Brigg was always going to face strong opposition as a matter of principle.
As it was, the Economics Legislation Committee rejected the bill without discussion. The committee, led by Australian Labour Party member Senator Jess Walsh issued a report that explained the reasoning. It is 72-pages long, but in short, it says the bill “lacks the detail and certainty that investors, consumers, and the industry should be provided with.” It goes on to add that it: “fails to interoperate with the established regulatory landscape.”
Crypto usage in Australia – casino players frustrated
Those in the Brigg camp are disappointed by the development – or the lack thereof, saying that Australia is now at risk of falling behind the rest of the world in crypto regulation. This, in turn, is causing frustration among Australian consumers – and especially those who simply want to use crypto to indulge their hobbies.
We refer, of course, to Australian online casino players, for whom crypto is something of a lifeline amid ever tighter regulation by Australian banks. Many of the online and mobile casinos that serve the Australian market tend to offer crypto transactions as a way around the regulatory complications, and it is a solution that is popular among players. However, the continued lack of clarity and regulation is just one more unknown for risk-aware casino gamblers.
Taking inspiration from elsewhere
Australia was keen to take a leading role as a pioneer in crypto regulation. But that’s just not happening now, and one thing the Australian senators agree on, regardless of political affiliation, is that they are falling behind. Perhaps the answer is not to seek to reinvent the wheel, but rather to grab onto the coattails of those who are forging ahead.
Two regulatory frameworks have been passed in Europe this year, the MiCA regulation in Europe and the Financial Services and Markets Act (FSMA) in the UK. These pieces of legislation will shape the European crypto sector in the years and decades ahead, although they take quite different approaches.
The UK’s FSMA is far from comprehensive. It is essentially a post-Brexit review and overhaul of financial services laws and regulations to ensure present-day fitness for purpose. These include provisions related to cryptocurrencies. But it also points to other regulations, such as the Economic Crime and Corporate Transparency Bill, which covers powers for Law Enforcement to seize digital assets. Also, the UK’s Financial Conduct Authority (FCA) has brought in various regulations surrounding the sale, advertising and marketing of cryptocurrencies. Essentially, the FSMA lays down the governing laws, but it leaves the FCA largely free to interpret them as it sees fit.
The EU has gone down the “sweeping reforms” road with MiCA compared with the UK’s more piecemeal approach. Of course, it has the added complication of needing to operate across borders, so has imposed a travel rule, which would not be necessary if Australia took a similar line. The point really is that the EU legislation is more prescriptive and specific.
Australian lawmakers are gazing across the oceans for inspiration. They can see pros and cons in both the flexible UK approach and the more rigid rules used by the EU.
FinTech Australia says its members “generally do not support a bespoke licensing regime separate to financial services licensing for crypto service providers,” while advocates for the rejected Brigg bill argue that it is the absence of a clear rulebook that has brought things to the current impasse.
One thing is certain. Australia needs to act or the exodus of talent bemoaned by crypto lawyer Joni Pirovich will continue.
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