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Policy affecting the US Cryptocurrency industry was an influential factor in the recent US elections. Will it be the same here in Australia?
To quote a Sky news article from 19 February 2025, “Cryptocurrency has emerged as an unexpected battleground heading into the federal election as Labor and the Coalition contend over who is the more pro-blockchain party. According to YouGov polling and Swyftx’s annual cryptocurrency tracking survey, 59 per cent of crypto users would vote for pro-crypto candidates above all other issues.”
Latest estimates are that at least 12% of Australians own crypto.
That all suggests that Crypto-pro voters could swing what is currently a very tight election.
What do the Parties Agree On?
Both parties agree that Australia needs to catch up with the USA and Europe and see this as a “major priority” post-election.
Both parties expect to implement comprehensive crypto regulations so that retail investors into crypto have the same consumer protections as the fiat money industry.
Both parties are prioritising crypto payments, stablecoins and tokenisation with both sides seeing ‘opportunities for Australia to be a pioneer in innovation’.
And both parties want to collaborate with the country’s four largest banks to eliminate the ongoing issue of debanking, a problem that has impacted many crypto-related businesses.
What Detail has been Issued by the Labor Party?
On Friday 21 March 2025, the Labour Party issued a policy statement to have legislation taking effect in 2026 that creates:
- a framework for Digital Asset Platforms (DAPs) that hold crypto for customers as their ‘Custody Providers’.
- a framework for payment by stablecoins so that they can be used safely by the retail public.
- Mechanisms to safely use crypto across all types of financial markets and the broader Australian economy, such as systems for paying for goods and services with crypto instead of fiat money, investments that are based on crypto and not fiat money and “tokenising real world assets” so customers can buy small ‘shares’ in cars, land, houses, artwork, businesses and any other “real world asset”.
The Labor Party intends to licence and control DAPs based on the things they do. For example:
- DAPs that only provide custody services and create a platform for trading of core cryptos such as layers 1, stablecoins and wrapped tokens, will only require an Australian Financial Services Licence (AFSL).
- Those DAPs will have to comply with common AFSL requirements such as providing services honestly, fairly, and efficiently, avoiding conflicts of interest, and meeting minimum capital adequacy.
- But additionally, those DAPs will also have to comply with rules that are specific to cryptos such as:
- rules for safeguarding customer assets (based on existing ‘client monies’ rules and the existing ‘minimum standards custodial and depository services’).
- requirements governing the redemption of stored value represented by tokens.
- new obligations tailored to address the unique risks of DAPs, for example tailored disclosure rules for digital assets without issuers and disclosure of information about what backs up the value of the digital asset.
- It may be that DAPs that do more than provide custody services and/or create a platform for trading of core cryptos, may also need the more expensive Australian Market Licence, but this is currently unclear.
What Policies will the Coalition Issue?
We will soon see a formulated policy from the Coalition. Until then, we can only speculate.
Let’s wait and see.
Conclusion
No matter how Government is formed after May 2025, with the western world rapidly equalising crypto with fiat money systems, we will likely see a new industry develop into mainstream Australia.
Authors Jim Holding & Darren Fooks
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