The Australian cryptocurrency sector is largely delighted by the recent appointment of Andrew Charlton as the new Assistant Minister for the Digital Economy. Charlton has been a vocal supporter of blockchain technology and will oversee emerging technologies. In terms of cryptocurrency news in Australia, this is a positive step in the right direction.
Charlton has been an advocate for balanced regulation while supporting growth within the digital assets industry. Leaders think that this is a critical step in the right direction when it comes to clarity in the regulatory space. Read on to find out more about those changes, the growth of Australian crypto, and more.
Critical Crypto Exchange Regulatory Framework Changes
This move is a critical one in terms of implementing a new regulatory framework, particularly for cryptocurrency exchanges. These steps will require them to obtain licensing and adhere to more specific financial standards. Let’s look at the key changes:
Licensing Requirements. A new licensing regime is going to be introduced. Rather than requiring full market licenses, exchanges will likely be required to get Australian Financial Services Licenses (AFSLs).
Third-Party Custodians. Additionally, Australian cryptocurrency exchanges will be required to make use of third-party custodians when it comes to holding customer assets.
Financial Services Standards. A key change to the regulatory framework is that exchanges will face the same general obligations that financial service providers do. This includes providing services fairly and honestly.
Minimum Capital Requirements. In addition to the aforementioned changes, cryptocurrency exchanges will be required to meet barometers for minimum capital adequacy obligations. This is meant to help prevent potential collapses like what happened to the exchange FTX.
Crackdown on Dormant Exchanges. AUSTRC is also going to begin reaching out to exchanges that show signs of being dormant. It is possible that their registration may be canceled should it be proven that they are no longer active.
Registration with AUSTRAC. AUSTRAC, the Australian Transaction Reports and Analysis Centre, will be regulating platforms that offer crypto trading, and those platforms will have to register by March 31, 2026.
Crypto Industry Continues Growth in Australia
These changes to the regulatory framework are a must according to industry experts. The head of Crypto.com’s Australian arm, Vakul Talwar, said in a statement that he believes that the appointment of Charlton is a sign that greater importance is being taken in the digital economy.
Going back to the previous election, Talwar and the major crypto exchange have had great interest. Talwar noted that the “industry has grown significantly,” while underscoring the need of Parliament to “ensure that as the digital economy continues to merge its way into traditional finance, appropriate regulations are in place.”
Growth in the industry is a key driving factor behind these moves. It is estimated that roughly 31% of Australian adults either have previously owned or currently own crypto. That equates to roughly 6.2 million people, up from 28% of Australians in 2024.
Why Increased Regulations Can Benefit the Crypto Industry
Through all the discussion about new regulatory framework, particularly for exchanges, discussion about why these changes become necessary has been a bit muted. There are several key reasons why new regulatory framework within the industry, including those laid out below.
Building Trust
Perhaps the most important aspect of changing regulations is to help provide greater legitimacy for the cryptocurrency industry. The more legitimacy behind the industry, the more potential institutional investors will be attracted to the marketplace.
By drawing in more traditional financial institutions, there is greater stability and maturity in future cryptocurrency markets. This would be a key step in reducing the much talked about volatility and risk that has been traditionally associated with investing in crypto. Clearer regulations will also boost confidence in retail investors as well.
Broader Adoption
Though cryptocurrency has been growing over the last several years in terms of adoption, it isn’t where experts believe it could be. By introducing a more stringent, clear regulatory framework, it is believed that innovation will be encouraged, and competition will be much healthier within the crypto industry.
The more accessible and reliable cryptocurrency becomes, the broader potential adoption of the market will be. Regulations are also critical when it comes to tax treatment of these digital assets, which makes it easier for both individuals and businesses to make them part of any future financial plans.
Protecting Investors
Investor protection has been a major hot-button topic since the very beginning. More consistent regulations should help protect investors from things like market manipulation, misleading information, scams, and other forms of fraud.
By implementing disclosure requirements, there is some reassurance that investors have access to the necessary information required to make the most informed decisions possible. Further regulation will also help protect against illicit and illegal crypto activities like terrorist financing and money laundering.
Market Transparency and Efficiency
A common complaint among investors and experts is a lack of transparency in the marketplace. Through new regulatory changes, market efficiency can be greatly improved by reducing the potential risk of manipulation while also making the playing field far more level to all investors.
Another positive aspect of implementing more consistent regulations would be to ensure greater transparency in transactions. Investors can and should be able to access information accurately and reliably without having to wonder about the validity of that information.
Addressing Illicit Activities and Financial Stability
One area of major concern among industry critics is the potential uses of cryptocurrencies for illicit activities. With better regulations, it is expected that concerns about illicit activities and financial stability could be addressed in a satisfactory manner.
Counter-terrorist financing (CTF) and anti-money laundering (AML) measures would go a long way toward preventing the potential use of cryptocurrencies for illegal acts. Reporting and transparency requirements will make it much easier for regulators to effectively monitor transactions and get ahead of potential risks.
Fostering Competition and Innovation
Australia’s government has been vocal about keeping pace with industry standards in an effort to remain at the forefront of the global cryptocurrency marketplace. By introducing more reliable, consistent regulatory framework, it can do that by encouraging healthy competition and fostering innovation.
Why is that so important? More consistency in the marketplace will bring forward new and improved technologies, services, and protocols that are meant to benefit not only investors but users as well. It will also draw high-level talent to the Australian cryptocurrency marketplace, furthering future developments and innovations that will help keep Australia at the forefront of the market.
Final Thoughts
Australia has taken steps in recent months to keep pace with the worldwide leaders in crypto. The appointment of Charlton shows that the Australian government is serious about progressing the industry in Australia, keeping it at the forefront of the marketplace.
How these regulatory frameworks will come off remains to be seen, but there is a collectively positive outlook from industry insiders. Major exchanges like Swyftx are already a fan of Charlton’s appointment, feeling that it would be “unequivocally good news for crypto in Australia.”
