Australia stands at a crossroads with respect to crypto, and looming regulation of the space stands to help the industry create local jobs, Kraken says.
The Senate’s Economics Committee Inquiry into the Digital Assets Bill held this month, is commendable in its consultations with our industry to guide the Government’s approach towards the dynamic world of crypto assets.
But the time for consideration is limited – there is value in action, particularly when our global competitors such as the EU are considerably further ahead in the regulatory process than we are.
To put it plainly: it’s much easier to hire and grow when you can reasonably predict what the future holds.
The Digital Assets Bill, to its credit, recognises that we can’t copy and paste existing financial regulations onto crypto. Cryptoassets require a tailored, purpose-built regulatory environment that acknowledges its distinct characteristics.
However, the industry isn’t demanding a reinvention of the entire financial regulation system.
A call for regulation
Australians will benefit from clear regulations that deliver the benefits of customer protection while encouraging innovation, competition and choice. In practice this means Australian customers transacting directly with locally licensed and regulated entities, including the local operations of global platforms like ours.
As a nation, we’ve grown used to getting the short end of the stick when it comes to choice. If we get regulation right, this doesn’t have to be the case for crypto.
All that said, the best case for regulation is, almost always, the economic one: Regulatory clarity translates to job growth in Australia. This is particularly true for multinational businesses like ours.
It becomes a daunting task to justify expanding our local team, especially in specialised areas that require upskilling (like professional trading services), when the looming shadow of regulatory uncertainty might necessitate an operational overhaul in the near future.
Taking a global perspective, Australia does have a momentary advantage. By observing and learning from international regions, like the EU’s MICA regulations, we can derive insights on achieving a balanced regulatory landscape.
These regions demonstrate the feasibility of consumer protection without impeding innovation through restrictions.
These advantages are fleeting
If Australia decides on a regulatory framework that is excessively burdensome or expensive to enforce, it might inadvertently drive some crypto service providers offshore.
Such a move wouldn’t merely signify the departure of companies, but also the migration of skilled Australian talent – an undesirable outcome for our nation’s job ecosystem.
Importantly, these businesses would also fall outside the new regulations, leaving Australian consumers unprotected.
It’s essential to underscore that the crypto industry, while having made significant strides, is still nascent. The next decade will undoubtedly witness further evolution, with myriad operating models surfacing and subsequently refining their propositions.
Regulation isn’t just a guiding tool; it will fundamentally sculpt the trajectory and nature of these models. This regulatory responsibility is immense and one that Australia must embrace with both foresight and wisdom.
Taking no action, or being caught in a quagmire of regulatory indecision, is itself a decisive step – one fraught with consequences. Australia must ensure that its regulatory framework not only protects consumers but also fosters innovation.
It’s not just about safeguarding the crypto industry and its users, but also about securing a prosperous future rife with opportunities for Australians. The stakes are high, and the implications profound.
But most importantly, we must act.
This article was developed in collaboration with Kraken, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
