Crypto Execs in Australia Warn Government Against Classifying Digital Assets as Financial Products

• Crypto executives have issued warnings in response to Stephen Jones’ comments about the country’s regulatory framework on digital assets.
• Jones proposed token mapping as a part of an effort to bring in legislation to regulate the digital asset sector.
• He also mentioned that the government is not keen on structuring an entirely new set of rules for crypto, which fundamentally shares the same characteristics as a financial product.

The crypto industry in Australia is up in arms following a comment made by Stephen Jones, Assistant Treasurer and Minister of Financial Services, in an interview with the Sydney Morning Herald on January 22. Jones proposed token mapping as a part of an effort to bring in legislation to regulate the digital asset sector later in 2023. This has caused a flurry of disquiet among crypto executives in the country, who are wary of the government’s stance on classifying all cryptocurrencies as financial products under the law.

One crypto executive admitted that token mapping would be necessary as part of the government’s efforts to regulate the digital asset sector. This would be followed by a consultation process within the industry. However, Jones mentioned that the government is not keen on structuring an entirely new set of rules for crypto, which fundamentally shares the same characteristics as a financial product. He said: “I don’t want to pre-judge the outcomes of the consultation process we are about to embark on. But I start from the position that if it looks like a duck, walks like a duck, and sounds like a duck, then it should be treated like one.”

The minister further added that “Other coins or other tokens are essentially used as a store of value for investment and speculation. There is a good argument that they should be treated like a financial product.” While this may be true, the crypto executives are concerned that such a move would stifle innovation in the industry. It could also hinder the growth of cryptocurrency businesses in Australia, as they would be subject to the same stringent regulations as traditional financial products.

The debate surrounding the classification of cryptocurrencies as financial products is ongoing and the crypto industry is keen to see how the government will move forward with its plans. It remains to be seen whether the government will go ahead with its proposal of classifying digital assets as financial products, or if it will come up with an entirely new set of rules for the crypto sector. Nevertheless, it is clear that the crypto executives in Australia are not happy with the potential implications of such a move and are hoping that the government reconsiders its stance.