Australia is set to become the first country to take a virtual inventory of the cryptocurrency sector, with Treasurer Jim Chalmers recently announcing a “token mapping” project that involves grouping types of crypto-assets based on their technological characteristics and underlying code.

This, Mr Chalmers said, would be “a first step in the reform agenda”.

“As it stands now, the crypto sector is largely unregulated and we need to do some work to get the balance right so we can embrace new and innovative technologies while protecting consumers.”

While the government’s determination to tighten crypto rules was welcomed by experts, Professor Barney Tan, head of the School of Information Systems and Technology Management at UNSW Business School, warned that it could have a significant impact on financial services and fintech companies.

“They will have to offer more transparency about the cryptoassets they offer,” Mr Tan said.

“Their revenue could also be affected on two fronts – the market may be wary of investing in these crypto-assets, and increased regulatory scrutiny may mean some of their existing revenue streams are simply no longer viable,” he explained.

As it stands, all types of cryptocurrency assets will be affected by the new changes, Professor Tan noted.

“The token mapping exercise is not meant to be a one-off,” he said.

“This will continue and evolve as new forms of crypto-assets emerge. Technology may evolve ahead of regulation in the short term, but regulation will also evolve in tandem so that the regulators’ objectives are met.”

But while investors may be worried about the impact regulation could have on the popular blockchain technology, Professor Tan highlighted multiple benefits of regulation, including establishing a framework for equal taxation, helping to prevent fraud and providing stronger protections.

“It can also help when it comes to combating money laundering, engaging in counter-terrorist financing (CTF) and preventing other financial crimes,” he said.

“It’s about regulating the ‘Wild Wild West’ and protecting investors from themselves even as they join what they see as a gold rush on cryptocurrency exchanges.”

The Australian Taxation Office estimates that more than one million taxpayers have interacted with the crypto-asset ecosystem since 2018. this way.

Maja Garatsa Djurdjevic

Maya’s career in journalism spans more than a decade in finance, business and politics. Now an experienced editor and reporter in all elements of the financial services sector, before joining Momentum Media, Maya reported for several established news outlets in South East Europe, looking at key processes in post-conflict societies.