Following recent comments made by Australia’s deputy treasurer on the subject, cryptocurrency executives in Australia have warned against lumping all digital assets into the same category as financial assets. They say this is particularly important in light of recent regulatory developments.

In an interview with the Sydney Morning Herald published on January 22, 2018, Assistant Treasurer and Minister for Financial Services Stephen Jones provided an overview of the current position of cryptocurrency legislation in the nation.

According to a cryptocurrency exchange executive, he confirmed that the government was on track with its “token mapping” exercise it was conducting this year to determine which crypto assets should be regulated. He also stated that a consultation process is planned “to start soon” with the industry. Jones, on the other hand, said he was “not that attracted” to the idea of ​​establishing a new set of laws for something that, in his opinion, functions primarily as a financial product. “I don’t want to make any assumptions about the results of the feedback gathering process that we are going to undertake.

But I start from the premise that if something walks like a duck, quacks like a duck, and looks like a duck, then it should be treated like a duck,” Jones said.

“Other currencies and tokens are basically used as a kind of store of value to engage in financial speculation and investment. There is a compelling case for treating them in the same way as a financial instrument.”

According to the Sydney Morning Herald (SMH), the Australian Securities and Investments Commission (ASIC) and the Commonwealth Bank, one of Australia’s “Big 4” banks, are in favor of regulating cryptocurrencies as financial products. ASIC is Australia’s financial regulator. Commonwealth Bank is one of the four largest banks in Australia. However, players in the cryptocurrency sector have warned against taking a blanket approach to cryptocurrencies and their assets.

“The trick is to protect consumers without regulating well-run domestic digital asset businesses and forcing people to use offshore exchanges subject to less rigorous checks and balances,” he concludes. “The phrase ‘the trick is to protect consumers without regulating well-managed national digital asset businesses’ closes the loop. Meanwhile, the CEO of a company that provides cryptocurrency on-ramps, called Holger Arians, expressed concern. that excessive regulation could “seriously undermine” the pioneering role Australia has been playing in the cryptocurrency industry.

An “overly prescriptive approach” to regulation is something to be avoided, according to Caroline Bowler, CEO of Australian cryptocurrency exchange BTCMarkets. Because of this, our digital economy may lag behind in the future, stifling our ability to compete internationally.

In light of the FTX disaster in November, Australian lawmakers and their colleagues around the world have felt a heightened urgency to act. However, the Australian financial authorities have yet to publicly formulate their regulatory framework.

According to Jones, the failure of FTX “leaves beyond doubt” the need for cryptocurrency regulation.

Fred Schebesta, an Australian entrepreneur and investor in the cryptocurrency space, issued a warning in September that speeding up the token mapping process could be detrimental to business.

The intricacies of token mapping are not fully understood, and it is essential that Australia’s “nascent” cryptocurrency economy “aligns itself with the other major markets and their legislation,” as he further explained.

Crypto advocacy organization Blockchain Australia shared this sentiment, stating at the time that if all crypto assets were considered financial products, it would be detrimental to investment and innovation in the cryptocurrency sector and would lead to job losses associated with cryptocurrency. company.