(Kitco News) - The Australian government has announced that it intends to prioritize the “token mapping” of crypto assets in 2022 as part of the country’s efforts to “identify how crypto assets and related services should be regulated.”
The token mapping process will involve investigating the various characteristics of all digital assets used in Australia to classify them based on their asset type, underlying code, and other defining technological features.
Once asset classes are clearly defined, the government can regulate the industry based on existing laws and enact new laws where a particular asset class requires specialized legislation.
According to a statement released by Australian Treasurer Jim Chalmers, “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.”
Chalmers noted that the move is being made to keep practices up to date and protect consumers.
“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,” Chalmers said.
Australia’s tax office estimates that more than one million people have interacted with crypto assets in the region since 2018.
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Token mapping is the first step in the process of reforming crypto-related laws in Australia and will help determine how crypto assets and related services should be regulated. Australia is the first country in the world to formally institute a token mapping initiative.
The announcement cited previous attempts to regulate the cryptocurrency industry in the country but suggested that those attempts “prematurely jumped straight to options without first understanding what was being regulated.”
“The Albanese Government is taking a more serious approach to work out what is in the ecosystem and what risks need to be looked at first,” the report said.
The main focus of the token mapping will be to “identify notable gaps in the regulatory framework, progress work on a licensing framework, review innovative organizational structures, look at custody obligations for third-party custodians of crypto assets and provide additional consumer safeguards.”
This move by Albanese’s government comes just three months after defeating the previous labor administration led by Scott Morrison.
The announcement from Chalmers closed by stating that “A public consultation paper on ‘token mapping’ will be released soon.”
