According to a report from The Sydney Morning Herald, Australia Minister of Financial Services, Stephen Jones, has stated that there are valid reasons for classifying certain cryptos as financial products under the law.
This comes as the federal government plans to introduce a bill to regulate the cryptocurrency industry later this year.
Jones predicts that cryptocurrency regulation will be one of the most important issues facing the fintech industry in 2023, and he believes that as a first step, the Australian government will shortly start an exercise called token mapping that will demonstrate which cryptocurrency assets it intends to control.
According to the minister, the failure of FTX demonstrates without a reasonable doubt the necessity for crypto regulation, and the government’s attention has been on crypto assets that behave like financial products but are unregulated.
I don’t want to pre-judge the outcomes of the consultation process we are about to embark on. But I start from the position that if it looks like a duck, walks like a duck and sounds like a duck then it should be treated like one.Stephen Jones
He went on to say that he is not really interested in establishing a whole different regulatory system for something that is, in all practical terms, a financial product.
At the moment, a significant portion of the cryptocurrency industry remains unregulated since many crypto items are not currently seen as financial products.
Jones, who believes bitcoin is trying to imitate or replace existing forms of money but is not a financial product because of this, says the government has not yet decided on a policy.
Other currencies and tokens are basically being utilized as a kind of value stored in order to engage in financial speculation and investing. He went on to say that there is a compelling case for seeing them in the same manner as a financial instrument.
Australia crypto executives are not in agreement
On the other hand, executives working in the cryptocurrency industry in Australia have cautioned against grouping all digital assets together in the same category as financial goods. The players on the market have cautioned against taking a sweeping stance toward crypto assets.
According to these individuals, the classification of this technology as a financial instrument in the absence of a transparent and practical road to licensing and compliance would likely cause even more crypto enterprises to relocate overseas and will increase the potential for danger.
The executives are worried that an excessive amount of regulation may have a negative influence on the leading position that Australia has been playing in the cryptocurrency space.
In light of the FTX catastrophe in November, Australian lawmakers and their worldwide colleagues have sensed a greater urgency for action. However, the Australian financial authorities have not yet publicly formulated their regulatory framework.