Australia plans on reviewing how cryptocurrency assets are managed this year by undertaking “token mapping” which has never been done before. The Labour government of Australia will be carrying out the process this year itself. This will be in order to keep the practices up to date and also safeguard customers.
“Token Mapping” is a way of defining different types of digital assets which will group them all in under the correct regulatory framework. The plan to regulate the industry by enhancing consumer protections were taken forward by a committee previous year itself, as mentioned by Australia’s Treasury department.
As per Australia’s tax office estimates there were more than one million people who have interacted with crypto assets in an unregulated market. This data has been collected since 2018. The government now is aiming to change and upgrade the regulatory system.
Australian Treasurer Jim Chalmers said recently,
Australians are experiencing a digital revolution across all sectors of the economy, but regulation is struggling to keep pace and adapt with the crypto asset sector
The token mapping is primarily going to help classify tokens which are based on various asset types, considering their underlying code, other technological features as well.
This is specifically beneficial in terms of defining various asset classes. The government will be able to regulate the industry better based on the current laws and fill in the gaps for the other asset classes which are in need for specialised legislation.
The process of token mapping also involves revealing the characteristics of asset tokens that are present in Australia.
Jim Chalmers also stated,
As it stands, the crypto sector is largely unregulated, and we need to do some work to get the balance right so we can embrace new and innovative technologies while safeguarding consumers.
Jim Chalmer further mentioned that this process of token mapping will help the government to work on licensing frameworks in a better way taking into considerations the custody obligations for the exchanges along with giving additional customer protection.
It has been the first ever time that Australia’s new Labour government had voiced the intentions to bring in crypto regulations since the win three months ago.
The idea behind the this exercise is directly related to safeguarding consumers from market volatility while educating the public about the potential dangers associated with the crypto industry.
The government also referred to the crypto advertisements which have been collaborating with big sporting events. This has also pushed the government to come up with a plan to amp up regulations.
Crypto.com had signed a sponsorship deal with the Australian Football League which is valued at $25 million in January. Swyftx which is a domestic exchange that has signed three-year deal for an undisclosed amount of money in February.
Featured image from TechStory and chart from TradingView.com
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