The Australian Treasury will most likely delay enforcing new cryptocurrency rules for the middle of 2024 or even 2025.
The local government was expected to impose rules by the end of 2022. Some expected the authorities would rush to do so this year, especially after the multiple collapses and investor losses that undermined the sector lately.
Documents released under Freedom of Information Laws revealed that the Australian government will take its time before setting a comprehensive regulatory framework for the local cryptocurrency sector. The ruling body will contemplate the matter in Q2 and Q3 this year and could roll out the legislation in 2024 or even 2025.
While some consumers believe the unrestricted environment could cause additional problems, the Treasury thinks a rush would be unnecessary due to the investor outflow caused by the recent catastrophes in the industry, such as the FTX demise.
“Treasury considers these concerns are somewhat mitigated by the current market conditions resulting in less consumer demand for crypto assets; and the need to complete the token mapping exercise to provide clarity on how any new licensing framework would operate in practice,” the document reads.
The officials further maintained that the rise in interest rates (a policy that numerous central banks initiated to tackle the galloping inflation rate) had pushed investors away from risk assets, including cryptocurrencies.
Subsequently, the statement informed that the Treasury had formed a special “crypto policy unit” within the department whose main goal is to ensure maximum consumer protection. The division intends to propose a ban on cryptocurrency ads to shield individuals from fraudulent schemes.
Keeping this in mind, it will not come as a surprise if Australia announces some of the strictest rules when the time comes.
Are Australians Really Backing off From Crypto?
Contrary to the Treasury’s assumption that the interest in cryptocurrencies has recently vaporized, a Finder’s research from October last year showed that 23% of Aussies have some exposure to the asset class. Recall that the figure was 17% in 2021 (when bitcoin and most altcoins registered all-time high prices).
One factor that could have boosted the enthusiasm could be the macroeconomic condition of Australia. Its inflation rate hit 7.3% towards the end of 2022 (a 32-year high), while numbers for the first month of 2023 are even more concerning: 7.4%.
Australia’s increased interest in crypto in the background of a financial crisis is not something new. The residents of Argentina, Turkey, Lebanon, and many other nations have sought alternative monetary instruments lately due to severe political or economic issues.
A survey conducted by the Independent Reserve at the end of November last year estimated that the number of Australian HODLers is above 25% even after the infamous FTX crash, which harmed many domestic investors. Nearly 91% of the participants said they were aware of Bitcoin’s existence, and 43% admitted having some knowledge about Ethereum.