Caroline Bowler comments on Treasury statement
BTC Markets welcomes the announcement from Treasury regarding the development of a regulatory framework for cryptocurrency exchanges and custodial requirements for our sector. We have been longstanding proponents of regulation, alongside other industry participants.
Custodial services, or safeguarding of assets, differs in digital assets versus traditional finance. We would anticipate a regime to reflect those differences and mitigate specific risks. Similarly, for exchanges, segregation of client assets, capital requirements and auditing are in line with industry expectations. It is important that regulation balances the requirements of investor protection without smothering innovation.
We see this potential regulation as an opportunity for Australia. It will correctly position us alongside our global peers as a leader in digital asset regulation. This will be a win for the Australian economy of the future.
Further commentary on BTC Markets’ stance:
In the absence of clearly defined cryptocurrency regulations, BTC Markets adopted a conservative approach to the management of client assets. We applied a risk management framework modelled on the traditional finance sector, adopting similar measures where applicable. In essence, creating an industry standard for other Australian based crypto exchanges to follow. A conscious decision was made to ensure our clients’ assets were segregated, onshore custody provided and 1:1 ratio maintained.
While there are valid concerns about governance and behaviour, there are also intrinsic differences in risks that must be considered when regulating the industry. The problems that have surfaced over the past week, are not cryptocurrency related but exacerbated by a lack of effective governance and regulation, coupled with highly unethical human decision making.
Industry participants such as BTC Markets, will continue to engage with government representatives in crafting proportionate regulations to shape the cryptocurrency landscape. It is important to ensure that ongoing growth and innovation in our industry, continues to thrive. We believe that regulation of cryptocurrencies should not be seen as an end goal; rather it should be part of a broader strategy for promoting innovation in this space.
The future of blockchain technology is evident as is the importance of the cryptocurrency sector in securing Australia’s presence as a technology leader on the global stage. The core fundamentals have not changed, the underlying technology is still the same and regulation needs to focus on governing human behaviour, ensuring consumers are protected whilst supporting the continued evolution of the crypto industry in Australia.
