Investor's Outflow Delays Crypto Regulations In Australia

Investor’s Outflow Delays Crypto Regulations In Australia

Updated: 07 March 2023

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What – There have several cases of fraudulent activities in the crypto space over the years, even in recent months.
Why – This is the basis on which the Australian government intends to create new crypto regulations.
What Next – The Australian government announced that it would be postponing the implementation of the new cryptocurrency regulations.

Authorities worldwide are doing enough to curb the situation by creating more rigid rules to protect crypto investors and users. But in a move that has surprised many in the financial industry.

Australia Halts Regulations

Due to the effect toward the close of 2023, the regulations were designed to increase transparency and reduce the risk of money laundering and terrorist financing in the cryptocurrency industry.

The announcement of the postponement, which came from the Treasury, revealed that the new date for implementation is still uncertain but will likely take effect in 2024 or 2025. The government has stated that it remains committed to implementing the regulations, but it will take time to ensure they are balanced and clear to investors.

Meanwhile, some consumers are concerned that the unrestricted crypto environment could result in more chaos. On the other hand, the Treasury believes that rushing into implementing the regulations isn’t necessary, given the outflow of investors from the industry due to recent fraudulent cases like the demise of FTX in November.

Will Australia Still Create Crypto Regulations?

The Treasury believes that the interest of Australians in digital currencies has fizzled away due to the negative occurrences in the industry in recent times. But contrary to this belief, an October research revealed that about 23% of the citizens have a good knowledge of the industry.

This percentage indicates that more Australians are getting into the system, given that the percentage as of 2021 was 17%.

One of the major driving forces of their interest is the country’s macroeconomic condition. Toward the end of 2022, it recorded an inflation rate of 7.3%, which was its 32-year high. In January 2023, the figure slightly appreciated to around 7.4%.

According to the Independent Reserve’s survey in November 2022, about 25.6% of the citizens still held their digital assets, even after the collapse of FTX. Moreover, about 43% admitted that they have a level of understanding of Ethereum, and close to 91% noted that they have good knowledge of BTC’s existence.

Notably, the Treasury even formed a crypto policy unit to ensure that crypto users in Australia are protected from the chaos in the sector.

Also, the policy unit aims to propose an outright ban on crypto ads so that fraudsters will stop deceiving people with fake information. With all these efforts, Australia may create one of the strictest rules the industry has ever seen.

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