• Australian crypto executives have warned against classifying all cryptocurrencies as financial products under the law.
• Stephen Jones, Assistant Treasurer and Minister of Financial Services, mentioned that the country’s regulatory framework on digital assets will be introduced in 2023.
• Jones also mentioned that the government is not keen on structuring an entirely new set of rules for crypto, which fundamentally shares the same characteristics as a financial product.

The crypto industry in Australia has experienced a period of uncertainty as the government and crypto executives have been in disagreement on how digital assets should be regulated in the country. On January 22, Stephen Jones, the Assistant Treasurer and Minister of Financial Services, made a statement about the country’s regulatory framework on digital assets in an interview with the Sydney Morning Herald. In response, Australian crypto executives have issued warnings regarding classifying all cryptocurrencies as financial products under the law.

Jones noted that the government was on the path to introducing ‘token mapping’ as a part of an effort to bring in legislation to regulate the digital asset sector in 2023. This token mapping system is expected to be the first step towards regulating crypto assets and will be followed by a consultation process within the industry. Jones also mentioned that the government is not keen on structuring an entirely new set of rules for crypto, which fundamentally shares the same characteristics as a financial product. Jones said, “I don’t want to pre-judge the outcomes of the consultation process we are about to embark on. But I start from the position that if it looks like a duck, walks like a duck, and sounds like a duck, then it should be treated like one.”

In addition, Jones highlighted that “Other coins or other tokens are essentially used as a store of value for investment and speculation. There is a good argument that they should be treated like a financial product.” This statement by the minister has caused concern in the crypto industry, as the executives worry that the financial products regulation could be too restrictive for the sector.

As the government prepares to introduce regulations on digital assets in Australia, crypto executives have urged the government to take into account the unique characteristics of cryptocurrencies while formulating the regulatory framework. The sector is hoping to see a regulatory approach that will provide an environment conducive for the sustainable growth of the industry, while ensuring that all investors and stakeholders are protected.

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