The Australian government aims to create a regulatory framework for cryptocurrency exchanges starting in 2024, but full licensing and compliance with the new rules may not occur until 2025.
Proposed legislation expected next year will require crypto trading platforms and other digital asset providers to obtain licenses from Australian regulators. Companies will have a 12-month grace period to transition once the laws are passed.
This represents a major step toward formal oversight of cryptocurrencies in Australia. The country currently lacks comprehensive regulations tailored to digital assets.
The licensing rules follow previous government consultations on “token mapping” to categorize crypto assets. The latest draft legislation consultation runs until December 2023.
According to lawyer Michael Bacina, Australia wants to keep pace globally in crypto regulation with a consumer protection focus. The broad rules could cover models like NFT marketplaces holding user funds.
Exchanges may need an Australian Financial Services license if holding over $946 per client or $3.15 million in total. Domestic platform Swyftx supports equal regulations for local and foreign operators.
In addition to exchange rules, Australia’s central bank will release a CBDC report in 2024 outlining future work after piloting a digital currency. However, Australia isn’t expected to launch a CBDC for years due to unresolved issues.
The government’s crypto exchange licensing legislation represents a major milestone in providing clarity and protection for Australia’s digital asset industry.
