KPMG Australia (KPMG) welcomed the opportunity to provide a submission to Treasury on its cryptocurrency token mapping consultation (the consultation).
Crypto regulation will bring a number of benefits, including:
- investor confidence
- regulatory certainty
- reduced risk to consumers.
Token mapping is a critical first step in understanding the crypto ecosystem and ensuring a consistent and fair approach to the regulation of crypto assets in Australia.
KMPG is supportive of regulation of the crypto ecosystem as it will bring a number of benefits to consumers and investors.
KPMG supports the government’s commitment to improve the way Australia’s regulatory system manages crypto assets in order to provide greater protections for consumers and ensure regulatory settings keep up with technological developments.
Previously, KPMG has recommended a token mapping framework as a foundational step in determining regulatory requirements in submissions on crypto licensing and custody requirements for crypto asset secondary service providers, and the tax treatment of digital assets and transactions.
Although a crucial foundation for crypto asset regulation, token mapping is simply the first step towards comprehensive crypto sector reform. The key to successful crypto sector regulation is a fit-for-purpose regulatory framework that is reviewed regularly, in line with the changing landscape of the crypto sector.
After the cryptocurrency token mapping exercise, licensing and custody reforms are an important next step for cryptocurrency reforms. KPMG’s submission on licensing and crypto custody requirements for crypto asset secondary service providers discussed proposed obligations on providers that aim to support consumer confidence and provide regulatory certainty to cryptocurrency businesses and service providers.
KPMG recognises the complexity in seeking to classify crypto assets given the ability for assets to serve multiple functions or purposes and the potential for this to change over time.
Regulating crypto and enforcing tightened crypto policy has the potential to increase public trust in the crypto industry, improve the quality of crypto asset services, protect investors and consumers and support further innovation and investment in Australia’s crypto sector.
In this response, KPMG has outlined 15 recommendations at Section 1, and provided insights in relation to the consultation paper and directly responded to the consultation questions at Section 2.
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To discuss any of the recommendations made to Treasury on its cryptocurrency token mapping consultation paper, please do not hesitate to reach out.
