Speaking at the 2024 Australian Crypto Convention, Bragg highlighted the missed opportunities and potential risks of regulatory inaction, framing the government’s delay as a retreat from the global “crypto race”.
The senator argued that clear and efficient regulation is essential for fostering innovation, attracting investment, and protecting consumers and contrasted Australia’s current stance with proactive measures being adopted by countries such as Singapore, the UK, and the US.
Bragg praised the achievements of the previous Liberal government, noting that in early 2022, Australia appeared poised to implement comprehensive cryptocurrency regulation, with the former government actively pursuing reforms based on recommendations from the Senate select committee on Australia as a financial and technology centre.
Chaired by Senator Bragg, the committee proposed a 12-point framework, including a licensing regime for digital currency exchanges, capital adequacy measures, and taxation guidelines for digital assets.
The government swiftly adopted 11 of the 12 recommendations, releasing a consultation paper in March 2022 to progress these reforms.
However, Bragg said, when Labor assumed government, all progress ceased.
“When Labor came to power in May 2022, they had the opportunity to pick up and own the reform agenda,” Bragg said.
He noted that even high-profile incidents like the collapse of FTX in late 2022 failed to spur decisive action, leaving Australia’s crypto regulatory framework stalled under Labor’s watch.
“More than two years on from the collapse of FTX, crypto regulations are still nowhere in sight. This is despite Jim Chalmers tweeting, ‘Following the spectacular collapse of FTX late last year, the government is set to embark on a shake-up of cryptocurrency laws’ in October last year,” Bragg said.
The senator added that Labor’s release of the “Regulating digital asset platforms” consultation paper over a year ago has seen no further action and argued that it merely replicates what Treasury proposed in the CASSPr more than three years ago.
“Re-releasing a consultation paper that was released in March 2022 is another way for Labor to keep us in the regulatory slow lane,” Bragg said.
“Labor can commission as many papers as they want, but until these reforms are legislated into law, they are a waste of ink. At this rate, there will be no crypto regulations enacted during this term of Parliament.”
Highlighting that Parliament’s final sitting week of the year is next week, the senator said there is “little hope” of Labor acting on crypto regulation before the 2025 election.
“The industry now faces regulation via enforcement, with ASIC left to pick up Labor’s slack, as updates to Information Sheet 225 are expected mid-December,” he said.
Bragg also reflected on the Digital Assets (Market Regulation) Bill which he introduced in March 2023, which Labor rejected, arguing that Parliament must act if the government won’t.
“The introduction of my bill demonstrates that Labor’s excuses for delaying these reforms are unfounded,” he said.
“The framework I have proposed broadly aligns with what is proposed in Treasury’s consultation papers. This includes licensing for digital currency exchanges and custody requirements, and the issuance of stablecoins is included in the bill.
“The time for consultation is over. It is time these proposals became law.”
Bragg also highlighted the current situation in the US, noting that President-elect Trump’s plans for the US government to hold a strategic reserve of bitcoin could be an opportunity for Australia.
“If their pace of reform on crypto gatekeeper regulation is any indication, Labor will fail to adequately assess the opportunities and risks of a similar policy,” the senator said.
Bragg added that this week, he plans to push for the release of the Board of Taxation’s Review of the Tax Treatment of Digital Assets and Transactions in Australia through an order for the production of documents in the Senate. The review was commissioned by the former government to align crypto tax rules with global standard.
If passed, he noted, the order would compel the Treasurer to table the report in Parliament, making it publicly available. “It will be telling to see if Labor votes to support the order,” Bragg said.
Earlier this month, Treasury released a new consultation for the industry to consider the application of the OECD’s Crypto Asset Reporting Framework in Australia.
According to Bragg, this would require digital currency exchanges to share tax information with overseas jurisdictions.
Ultimately, the senator said: “Under Labor, crypto is dead in Australia.”
