The Australian Treasury is set to adopt a “tech agnostic” and “principles-based” approach to defining crypto assets in its token mapping of digital assets, according to Assistant Secretary Trevor Power. This framework aims to classify tokens based on their function and purpose. Power stated that the method would not be token specific and hopes that the crypto-specific legislation will be introduced by 2024.
Crypto assets that alter their function and utility over time will likely be subject to review in this system. Power mentioned that if they were significant enough, they would graduate through the regulatory system. He emphasized that the token mapping regulation would need to be “robust” in order to operate in a “tech-neutral” and “principles-based” manner to account for such changes.
The Australian Treasury considers token mapping to be essential for understanding how the crypto ecosystem interacts with the country’s existing financial regulatory frameworks. Power hopes that the crypto framework will be closer on the “spectrum” to the European Union’s Markets in Crypto Assets (MiCA) regulation, as opposed to the current regulatory position in the United States.
Power also expressed his openness to US and foreign digital asset firms considering the Australian market. However, he said this would only be possible if they comply with the token mapping framework, which intends to strike a balance between innovation and consumer protection.
The Australian Treasury conducted a consultation process in early 2023, roughly six months after introducing the token mapping framework. While the token mapping exercise has not been influenced by recent regulatory enforcement action by the United States Securities Exchange Commission (SEC), Power hopes that a more MiCA-aligned regulatory approach will help shape Australia’s crypto industry.
In conclusion, the Australian Treasury’s tech-agnostic approach to token mapping may pave the way for a more inclusive and adaptable regulatory framework for digital assets. It also highlights the global trend towards finding not just the right balance between innovation and consumer protection but also the importance of being flexible in the face of rapid technological advancements.
Source: Cointelegraph
