The Australian government published a consultation paper on token mapping on Friday and is waiting until March 3 to hear from relevant stakeholders.
The decision was made in August 2022, around three months after the previous Labor administration under Scott Morrison was replaced by Prime Minister Anthony Albanese’s new administration. In a statement at the time, the incoming administration promised to take a “more serious approach to work out what is in the ecosystem and what risks need to be looked at first.”
“Token mapping is the process of identifying the key activities and functions of products in the crypto ecosystem and mapping them against existing regulatory frameworks,” the paper said.
Australia has been trying to contain the damage done ever since the crypto contagion of 2022, which was made worse by the collapse of the FTX exchange. The government has been cracking down on a number of businesses after failing to act on its own worries about Sam Bankman-Fried’s enterprise. It took action to increase security around cryptocurrencies in December when it declared it will create a framework for the registration and regulation of cryptocurrency service providers by 2023.
According to Angela Ang, senior policy adviser at blockchain intelligence company TRM Labs and former regulator at the Monetary Authority of Singapore, “Australia’s token mapping exercise is the first of its kind by a national government, going back to first principles to understand crypto and map it to an existing regulatory framework.”
The major concern, though, was how Australia would approach Decentralized Finance (DeFi), according to Ang. Plans for cryptocurrency regulation were also disclosed in the token mapping consultation paper.
The goal is to “release a (separate) consultation paper proposing a licensing and custody framework for crypto asset service providers in mid-2023,” as this is “the logical next step for crypto reforms in Australia” following “token mapping.”
This consultation paper’s goal is to specify the requirements and operational guidelines that crypto asset service providers should follow when providing client asset storage.
The role of the government in regulating the crypto eco-system, potential investor protections, and ways to avoid frauds will all be discussed in the consultation paper on crypto assets that will be released in the middle of 2023. Additionally, Australia intends to finish its CBDC experiment this year, and at least two significant Australian banks intend to launch a stablecoin.