TrueNorthBit Dissects Australia’s New Regulations for Cryptocurrency
London, England, 2nd July 2021, ZEXPRWIRE – Want to invest your life savings to hit the jackpot using cryptocurrency?
Well, according to Laura Gibson, a broker of TrueNorthBit, you’re not the only one worried about your future and trading assets, so are the governments of many countries. Therefore TrueNorthBit is here with its expert team to keep you updated on every news around the world so you can make smart investments. Because if PayPal co-founder Peter Thiel can do it and Tesla can take payments in bitcoins then you can take a swing at it too.
What’s the deal with Bitcoin?
If you’re new to cryptocurrency, let me quickly brief you on what it is. It is a digital token first introduced in 2009 by Satoshi Nakamoto and since then it has been gaining a lot of popularity. Now companies like Tesla and Square are accepting it as a payment method too.
“What really makes cryptocurrency special is the degree of anonymity it offers without the interference of a third party but that is exactly what has the Australian government along with the government of many countries on their toes,” says Lisbon
Why are the governments so strict?
See, there are a lot of benefits of Cryptocurrency, such as anonymity and minimum transaction fee. However, it’s not regulated by any centralized governmental authority which gives people the potential to use it for illegal activities like money laundering and mining. Especially all the popularity that Bitcoin gained has not only attracted traders but money launderers too.
Therefore, countries are imposing strict rules and regulations to control any illegal activities. But Australia has been very stringent in setting regulations for cryptocurrency to manage “risky” crypto assets.
What do Australia’s security regulators plan?
The Australian Securities and Investments Commission (ASIC) sees cryptocurrency as a potential threat to harm the consumer market. So, they plan on backing exchange-traded products (ETP) and other assets to avoid any unpleasant circumstances for the consumers.
On 30th June 2021, the ASIC plans on consulting market experts to determine good market practices that can ensure the security of ETP. Especially now that the investors are rapidly rising in crypto. Even the Indian investment in crypto rose from $200 million to nearly $40 billion just 2 days ago.
According to Lisbon, the volatile state of digital currency, especially the sudden surge in the price of crypto this week and mid-April, has been a driving force for ASIC to more strictly regulate this payment method.
ASIC has set some priorities
While this new proposal from ASIC is covering many aspects such as risk management, pricing, ownership, maintaining fair market operations, and disclosure of assets to protect retail investors. But there are two key issues that ASIC particularly wants to address.
- Determining appropriate pricing, classification, and authenticity of ETPs, including crypto-assets.
- Protocol for product issuers to ensure that products fall within the regulatory framework, especially regarding risk management, disclosure, and ownership.
According to ASIC, the only cryptocurrencies that meet their proposed regulation are bitcoin (BTC) and ether (ETH). This statement is further strengthened by a recent listing of Ethereum ETP on the Toronto Stock Exchange, a situation that was rather explicitly mentioned by ASIC in their proposal. Along with the Australian Securities Exchange (ASX) perspective on many crypto ETP applications.
According to Lisbon, the ASIC will not only stick with Bitcoin and Ether in the future. This is just a proposal and they most definitely will consider other cryptocurrencies in the future too.
People’s response to these regulations
ASIC has received a lot of criticism from firms in response to these regulations. Particularly from the firms and domestic blockchains that were proactively approached by ASIC in recent months to build trust and offer collaboration.
Most criticism received by the regulators is regarding the lack of transparency the existing regulations have and the obligation faced by crypto companies to comply with these regulations.
Interestingly, the ASIC addressed this criticism. In their response, the questions reading classification and regulation of crypto assets are for the government. The Senate Select Committee of Australia has been vigorously working to evaluate the best possible options for developing a comprehensive regulatory framework for cryptocurrencies. In the proposal, the ASIC does advise to “not seek to pre-determine any decisions the committee makes.”
Opinions of well-known people
Alex Vynokur, the CEO and founder of Beta Share, agrees with ASIC’s proposal to offer retail investors exposure to crypto-assets underlying ETPs. In his opinion, it will offer enhanced protection to consumers. According to him, regulation of ETPs limited to only a few digital currencies that offer transparency, price discovery, and robustness is more beneficial.
Bottomline
At this point, regulators around the world have controversial opinions towards this proposal by ASIC. But you need to keep in mind that these regulations will not be implemented yet and as of now, the ASIC will be consulting with investors to see their perspective too.
Disclaimer: Our content is intended to be used for informational purposes only.
It is very important to do your own research before making any investment based on your own personal circumstances.
You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find on this article and wish to rely upon, whether for the purpose of making an investment decision or otherwise.
