The Australian Treasury will most likely delay enforcement of new cryptocurrency rules until mid-2024 or even 2025.
The local government was expected to enforce regulations by the end of 2022. Some expected authorities to rush this year, especially after the many bankruptcies and investor losses that have undermined the sector of late.
Documents released under freedom of information laws revealed that the Australian government will take the time to establish a comprehensive regulatory framework for the local cryptocurrency sector. The governing body will consider the issue in Q2 and Q3 this year and could roll out the legislation in 2024 or even 2025.
While some consumers think the unrestricted environment could create additional problems, the Treasury thinks it’s unnecessary due to investor outflows following recent industry catastrophes, such as the demise of the FTX.
“Treasury believes these concerns are being mitigated somewhat by current market conditions resulting in less consumer demand for crypto assets; and the need to complete the token mapping exercise to provide clarity on how any new licensing framework would work in practice,” the document reads.
The officials further claimed that the rise in interest rates (a policy initiated by numerous central banks to address galloping inflation) had pushed investors away from risky assets, including cryptocurrencies.
Subsequently, the statement stated that the Treasury had formed a special “crypto policy unit” within the department whose main purpose is to ensure maximum consumer protection. The division intends to propose a ban on cryptocurrency advertising to protect individuals from fraudulent schemes.
Keeping this in mind, it won’t come as a surprise if Australia announces some of the strictest regulations in its time.
Are Australians really going downhill from crypto?
Contrary to the Treasury’s assumption that interest in cryptocurrencies has recently evaporated, a Finder survey from last October found showed that 23% of Aussies have some exposure to the asset class. Recall that the figure was 17% in 2021 (when bitcoin and most altcoins recorded all-time high prices).
One factor that could have boosted enthusiasm could have been Australia’s macroeconomic condition. Inflation stood at 7.3% by the end of 2022 (the highest point in 32 years), while the figures for the first month of 2023 are even more worrying: 7.4%.
Australia’s increased interest in crypto in the backdrop of a financial crisis is nothing new. The people of Argentina, Turkey, Lebanon and many other countries have recently sought alternative monetary instruments due to serious political or economic problems.
This is according to a survey by the Independent Reserve at the end of November last year estimated that the number of Australian HODLers is above 25%, even after the infamous FTX crash, which hurt many domestic investors. Nearly 91% of participants said they were aware of Bitcoin’s existence and 43% admitted to having some knowledge of Ethereum.
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