The Australian Ministry of Finance has unveiled a plan to develop cryptocurrency legislation in the country. The strategy aims to create a regulated ecosystem that balances innovation with consumer protection.

The relevant bill will be presented for public discussion later this year.

It will regulate exchanges and crypto custodians under the existing financial services laws. Companies are expected to comply with rules on asset protection and minimum capital requirements, as well as obtain an AFSL license.

According to the Ministry of Finance, the reforms will not affect all participants in the digital economy. Small platforms, blockchain developers, and companies whose products are not financial in nature will be exempt from the new rules.

Payment stablecoins will be regulated similarly to traditional systems. However, certain “stablecoins” and wrapped tokens will be exempt from taxes.

As part of the program, the government will collaborate with Australia’s four largest banks to address the issue of debanking crypto companies — the refusal of services.

Additionally, research into CBDCs and the launch of a regulatory sandbox will allow firms to test financial products without a license.

Federal elections, set to take place on May 17 or earlier, may impact the future of the reforms. The election will feature the Labor Party of Prime Minister Anthony Albanese and the opposition coalition led by Peter Dutton.

The opposition coalition has already expressed plans to prioritize crypto industry regulation if they win.

Caroline Bowler, CEO of BTC Markets, told Cointelegraph that the proposed reforms would help Australia remain competitive on a global level.

However, she called for clarification on capitalization and custodial requirements to prevent them from hindering investments.

Jonathan Miller, Managing Director of Kraken Australia, added that the urgent need for new laws is related to legal uncertainty and debanking, which are slowing down the development of the industry in the country.

It’s worth noting that in December 2024, ASIC accused Binance of consumer rights violations. According to the regulator’s statement, this led to significant losses from risky derivatives.