The Australian Treasury’s token mapping of digital assets will implement a “tech agnostic” and “principles-based” approach to define crypto assets. Trevor Power, an Australian Treasury assistant secretary, stated that the framework would classify tokens based on their function and purpose, making it easier to regulate them. The regulation would need to be “robust” to account for changes in the ecosystem. Power believes that crypto-specific legislation will appear in 2024, depending on how it is received by Australian lawmakers.
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The Australian Treasury’s token mapping of digital assets will use a “tech agnostic” and “principles-based” approach to define crypto assets. Trevor Power, an Australian Treasury assistant secretary, made the announcement during Australian Blockchain Week on June 26. The framework will classify tokens based on their function and purpose, making it easier to regulate them.
Power stated that the token mapping regulation would need to be “robust” to operate in a “tech-neutral” and “principles-based manner” to account for changes in the ecosystem. He also said that crypto-specific legislation would likely appear in 2024, depending on how it is received by Australian lawmakers.
According to Power, crypto assets that change their function and utility over time will likely be subject to review. “If they become very significant […] Then they will graduate through the regulatory system.”
The Treasury conducted a consultation process between February 3 and March 3, which came roughly six months after the token mapping framework was introduced on August 22. The Treasury considers token mapping to be essential to understand how the crypto ecosystem interacts with Australia’s existing financial regulatory frameworks.
Power stressed that the token mapping exercise wasn’t influenced by the recent parade of regulatory enforcement action by the United States Securities Exchange Commission (SEC). Instead, Power hopes that the crypto framework will fall closer on the “spectrum” to the European Union’s Markets in Crypto Assets (MiCA) regulation.
Power also welcomed U.S. and foreign digital asset firms to consider the Australian market, provided they abide by the token mapping framework. The framework intends to strike a balance between innovation and consumer protection. “There are two arms to every component of regulation. One is to make sure that that framework is there, and the second one is to make sure there’s room for industry to grow and be innovative.”
The Australian Treasury’s token mapping of digital assets will adopt a “tech agnostic” and “principles-based” approach to define crypto assets. The framework will classify tokens based on their function and purpose, making it easier to regulate them. The regulation will need to be “robust” to account for changes in the ecosystem. Power believes that crypto-specific legislation will likely appear in 2024, depending on how it is received by Australian lawmakers. The framework intends to strike a balance between innovation and consumer protection.
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