The Australian government is looking to tighten its crypto regulation, and has created a tool called “token mapping.”
The Australian government has begun drafting new legislation for the crypto market and with which to keep up with developments, while offering a Greater consumer protection.
The Australian Taxation Office has estimated that, More than a million taxpayers have bought or sold cryptocurrencies since 2018. Many of these transactions bypass institutions, so they believe that a broader and more detailed regulatory framework is needed. To do this, the Australian Treasury is working on a new tool called “token mapping”.
The tool has been presented in a Press release, in which the nation's government states that: "The objective will be identify notable gaps in the regulatory framework, advance work on a licensing framework, review innovative organizational structures, observe custody obligations for external custodians of cryptoassets and offer additional guarantees to consumers.”
For the current Australian government, the cryptocurrency sector is not adequately regulated, which is why a series of frameworks and tools need to be created to develop balanced legislation that protects users and, at the same time, encourages innovation and the development of new technologies.
What is token mapping?
Token mapping is a tool that allows Classify tokens and different types of assets. For this classification, the code with which they were created and other relevant technological characteristics will be taken into account.
This tool will be beneficial for classify and define the different types of cryptocurrencies and tokens. In this way, the Australian government will be able to better regulate the industry based on current laws and fill the gaps for new types of assets that need a specialized regulation.
The token mapping process also implies that they will have to reveal the characteristics of tokens and assets that are available in Australia.
According to Jim Chalmer, secretary of the Australian Treasury, The mapping process will also help the government to work on the licensing frameworks already taking into account custody obligations for exchanges while also offering additional protection to clients.
The sector's involvement in crypto regulation
The Treasury Secretary has also explained that before finalizing the token mapping, the Australian government will publish a Consultation document for the crypto sector, in which they will request opinions on the best way to implement the regulation.
The ultimate goal of this regulatory framework and token mapping is to identify notable gaps in sector regulation, review innovative organizational structures, examine custodial obligations for third-party custodians, and provide additional safeguards for consumers.
