In a move that has left industry stakeholders scratching their heads, the Senate Economic Legislation Committee in Australia recently rejected the “Digital Assets (Market Regulation) Bill 2023.” The Bill, led by Liberal Party Senator Andrew Bragg and co-authored by Western Australian Senator Dean Smith, was put forward as a comprehensive approach to regulating the burgeoning world of digital assets. However, with the rejection, the committee has called for further industry consultation to develop a “fit-for-purpose digital assets regulation in Australia.”
This isn’t a matter of simple bureaucratic delay; it has real-world implications for a nation seeking to find its footing in the competitive landscape of the digital economy. Various industry experts have been vocal about their concerns, urging a speedy approval process to capitalize on the global crypto boom. But the committee remains unconvinced, dismissing the bill as not yet ready for legislative green-lighting.
Senators Bragg and Smith have been vociferous in their disapproval of the committee’s decision. They argue that the absence of well-defined regulations for cryptocurrencies and other digital assets hampers Australia’s economic progress and puts consumer investments at risk. “Labor has locked Australia in the slow lane on digital assets,” lamented Bragg, painting a picture of a government missing out on the rapid advancements in blockchain technology and digital currencies.
But what did the bill actually entail? The draft legislation aimed to provide a comprehensive framework for digital assets—everything from auditing protocols to fund segregation, and even specific definitions for terms like ‘digital assets,’ ‘digital asset exchanges,’ and ‘stablecoins.’ It was designed not only to offer protections to consumers but also to provide the much-needed clarity that investors in the crypto space have been clamoring for.
Joni Pirovich, an Australian lawyer with an eye on the digital landscape, warns that the stalling tactics could have more profound implications. Since as far back as mid-2022, she observes, the lack of a robust regulatory framework has led to a talent and capital drain from Australia. Entrepreneurs, innovators, and investors are increasingly looking elsewhere, contributing to a scenario where Australia falls further behind in the global digital economy race.
Senator Bragg first tabled the bill on March 28, framing it as an essential component for bolstering Australian innovation and economic resilience. The bill was projected as a major step towards normalizing and institutionalizing the use of digital assets, making Australia a key player in an industry expected to be worth trillions in the coming years.
So, what happens now? The committee has called for further consultation, but time is of the essence. As nations around the world rapidly adapt to the realities of digital assets, the clock is ticking for Australia. Stakeholders from various industries have been quick to present their views, hoping for an expedited approval process. However, unless the committee acts promptly to give the green light to a comprehensive digital assets regulatory framework, Australia risks remaining in what Senator Bragg calls “the slow lane,” watching other nations speed ahead in the crypto highway.
