The Australian Treasury has initiated efforts to further fine tune regulation around cryptocurrency. It has published a consultation paper titled "Regulating digital asset platforms" to outline its approach. Instead of creating new rules specifically for cryptocurrencies, the regulation of crypto exchanges will be carried out under existing financial services laws.

The main focus of this regulatory framework is to oversee and regulate cryptocurrency exchanges and service providers, rather than individual cryptocurrencies or tokens. The Australian Treasury is considering making it mandatory for crypto exchanges to obtain a financial services license from the local financial regulator. These proposed rules will only apply to crypto exchanges holding more than$3.2 million ($5 million AUD) or more than$946 ($1,500 AUD) per individual.

Why does it matter?

With a quarter of Australians owning some sort of cryptocurrency, the treasurer, Jim Chalmers, stated that they are taking swift and systematic action to create a regulatory framework that balances consumer protection with the promotion of innovation in the digital asset industry.