Australian lawmakers reject senator Bragg’s crypto bill

• The Senate committee advised that further research should be conducted on the subject.
• The report asserted that the government’s approach to digital asset regulation was detrimental to Australian consumers and investment.

After several delays, the Australian Senate Committee on Economics Legislation has officially weighed in on the Digital Assets (Market Regulation) Bill 2023, proposed by Senator Andrew Bragg. On 4 September, the committee issued its verdict, recommending against passing the bill. Instead, they advised that further research should be conducted on the subject.

In a dissenting report, Senators Bragg and Dean Smith expressed a more favorable stance toward the bill. They suggested that the Senate approve it with some minor amendments. The senators particularly advocated for the removal of non-fungible tokens (NFTs) from the bill’s definition of regulated digital assets.

Among their additional recommendations, the dissenting lawmakers proposed excluding certain asset-based tokens, potentially including the Gold and Silver Standard and the BetaCarbon Token, from the definition of a stablecoin. They also advocated for extending the transition period from three to nine months.

Senate committee recommends against bill, while some senators disagree

In the report, Bragg and Smith called upon the Board of Taxation to review the tax treatment of digital assets and transactions within Australia. The aim is to introduce legislation in early 2024.

Additionally, they emphasized the importance of fully implementing the recommendations of the Council of Financial Regulators regarding potential policy responses to the de-banking trend in Australia. The Australian Department of the Treasury had previously acknowledged that the growing practice of banks severing ties with cryptocurrency firms could have undesirable consequences.

It also warned the situation could potentially drive the industry into underground channels.

The dissenting report asserted that the government’s approach to digital asset regulation was detrimental to Australian consumers and investment. It described the bill as the “first serious step toward implementing a comprehensive digital asset regulatory framework”. The report also lamented the abandonment of the former Liberal government’s ambitious crypto agenda.

Senator Bragg initially introduced the Digital Assets (Market Regulation) Bill 2023 back in March with the aim of safeguarding consumers and fostering investor confidence. The draft bill contained regulatory recommendations pertaining to stablecoins, exchange licensing, and custody requirements.

The release of this Senate committee report experienced multiple delays. Originally expected on 2 August, the committee requested extensions for the reporting date to 16 August. Subsequently, the deadline was postponed to 25 August and finally to 4 September.