Australia's Senate Committee Rejects Cryptocurrency Bill Proposed by Opposition Senator Andrew Bragg

The Australian Senate Economics Legislation Committee has rejected the "The Digital Assets (Market Regulation) Bill 2023," which was introduced by opposition senator Andrew Bragg. Instead, the committee has recommended that the government should engage in further consultations with the cryptocurrency industry to formulate appropriate regulations for digital assets within Australia.

Senator Bragg, who represents New South Wales, expressed his disappointment with the rejection, alleging that the Labor government's stance has been obstructing progress in crypto regulation.

The committee's decision to reject the bill is based on several factors. They cited concerns about the bill's lack of specific details and certainty. Additionally, they noted that the bill's approach deviates from the government's existing strategy and is not aligned with international regulatory frameworks. This misalignment raised fears of potential regulatory arbitrage and adverse impacts on the cryptocurrency industry.

Earlier, Prime Minister Anthony Albanese introduced a consultation paper related to token mapping through the Treasury in February. This paper was anticipated to lead to another consultation paper proposing a regulatory framework for licensing and custody of crypto asset service providers by mid-2023. However, the release of this subsequent paper has been delayed.

Blockchain Australia Chair and Digital Assets Lawyer Michael Bacina commented on this delay, underscoring the significance of the pending Treasury consultation in leveraging industry feedback gathered during the Senate Committee's assessment of the bill.

Meanwhile, Australia's central bank has initiated a pilot test to explore potential use cases for a Central Bank Digital Currency (CBDC). However, they have determined that any decision regarding the introduction of a CBDC in Australia is likely to be deferred for several years.