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The Australian crypto industry has called on the newly reelected Labor government to urgently make digital asset legislation a top priority to ensure Australia doesn’t fall further behind global markets.

The incumbent Australian Labor Party was returned in a landslide on May 3, picking up 54.9% of the two-party-preferred vote, against the Liberal and National Parties on 45.1%. Both parties went to the election promising crypto law reform, but only the opposition pledged to deliver draft legislation within 100 days.

Coinbase managing director for APAC John O’Loghlen said on May 5 the reelected Albanese Government has the “opportunity and the responsibility to move quickly on this issue” and called for a Crypto-Asset Taskforce to be established within its first 100 days “with the aim of bringing forward legislation that protects consumers, promotes innovation, and stops the exodus of talent and capital to other markets.”

Joy Lam, Binance’s head of global regulatory and APAC legal, said the exchange has been consulting with Treasury officials since late 2023 about its proposed legislation, and it was now time for action.

“Timing is really quite critical now because obviously it's something that has been discussed and kicked around for quite a few years,” she told Cointelegraph in an interview on May 2.

BTC Markets CEO Caroline Bowler said that “beyond the political implications, this result sets the stage for meaningful progress in Australia’s approach to digital asset regulation.”

Lam noted that the UK released its draft regulations last week, stablecoin bills are moving forward in the US, and the EU has already implemented its MiCA legislation.

“So there's a very clear shift. Everyone's moving towards providing the regulatory framework that is needed for the industry to develop in a sustainable way. So time is really of the essence now.”

Draft crypto legislation within months

Treasurer Jim Chalmers’ office told Cointelegraph that exposure draft legislation would be released sometime this year for consultation, and any legislated reforms would be “phased in over time to minimize disruptions to existing businesses.”

Although the Treasury has draft legislation on “regulating digital asset platforms” and “payments system modernization” scheduled for release by the end of June, Lam isn’t confident. "I don't know whether this quarter specifically is still sort of the timeline,” she said.

Related: Australian election will bring pro-crypto laws either way

While the ALP has been attacked by some over not taking any action in its first term in government, that may actually have resulted in a better outcome than legislation that took its cues from the approach of Joe Biden’s administration, which took a hard line on banks dealing with cryptocurrency and viewed most coins as securities. 

Industry figures report a noticeable evolution in the government’s approach to crypto between when proposals were first put out for consultation at the end of 2023 and when the Treasury released its much more positive “Statement on Developing an innovative Australian digital asset industry” in March this year.

The statement sets out key priorities, such as using the existing Australian Financial Services License (AFSL) regime to underpin the regulation of Digital Asset Platforms and payment stablecoins. It focuses on the safe custody of client assets by centralized providers and sidesteps issues around decentralized finance platforms. 

Lam welcomed the use of the AFSL regime. “Obviously, we don't need to reinvent the wheel,” she said. “It’s something that people know and understand. It's a pretty sensible move, and it’s also going to be much easier for regulators.”

Tokenization and sandbox

The government will also review the Enhanced Regulatory Sandbox, which aims to provide space for innovative digital asset startups to grow free of red tape. The statement also highlights opportunities with tokenization.

Lam said the change in emphasis showed the government has been listening to the industry. 

“It reflects the industry feedback that they would have received in 2023 as a result of the consultation, as well as the changing landscape because obviously it’s been evolving pretty quickly internationally,” Lam said.

“They do have the benefit now of looking at what has worked and hasn’t worked in other jurisdictions, and really building on those lessons.”

Dea Markova, policy director at Fireblocks, told Cointelegraph that “a lot of the groundwork and research is done” and it was looking broadly positive.

“Of course, a lot of details are still to come around Australia’s Digital Asset Platforms (DAPs) regime. What is significant here is the willingness of the Government to cut through the complexity and uncertainty on crypto intermediaries licensing.” 

The securities regulator ASIC released its own crypto regulations proposals (INFO 225) in December, and feedback from those consultations will help inform the government's new legislation. 

“In essence, it details how different token issuances and crypto intermediation will fit into Australia’s existing securities legislation, providing for a transition period," explained Markova.

The draft guidance suggests NFTs, in-game assets and memecoins are not financial products — the local equivalent of a “security” — while a yield-bearing stablecoin or a gold-backed token probably are.

The Treasury statement also highlighted issues with debanking. Lam said that simply regulating the industry would go a long way toward solving the issue.

“What we really want from governments and regulators is that clean licensing framework, because that goes a long way to mitigating the risk and giving the banks the comfort that they need,” she said. “And then, there’s probably going to need to be some additional guidance given to banks.”

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Despite reports in February suggesting that 2 million pro-crypto voters could decide the outcome of this week’s Australian Federal Election, crypto has barely rated a mention during the campaign.

“I think it’s a missed opportunity,” Independent Reserve founder Adrian Przelozny told Cointelegraph. “Neither side has made crypto a headline issue because they’re wary of polarizing voters or sounding too niche.”

But the good news is that after more than a decade of inaction, both the ruling Australian Labor Party (ALP) and the opposition Liberal Party are promising to enact crypto regulations developed in consultation with the industry.

In April, Shadow Treasurer Angus Taylor promised to release draft crypto regulations within the first 100 days after taking office, while the Treasury itself has draft bills on “regulating digital asset platforms” and “payments system modernization” scheduled for release this quarter.

Amy-Rose Goodey, CEO of the Digital Economy Council of Australia, said that both parties “are equally invested in getting this draft legislation across the line.”

“Irrespective of who gets in, we’re in a better position than we were about a year ago.”

Pro-crypto voters have choices in the Senate, too, with the Libertarian Party issuing a 23-page Bitcoin policy in March — calling for the creation of a national Bitcoin (BTC) Reserve and the acceptance of Bitcoin as legal tender.

The minor party is fielding five Senate candidates in different states, including former Liberal MP Craig Kelly, but doesn’t currently have anyone in the Senate. 

The progressive left-wing Greens party has not outlined a position on crypto, while the conservative right-wing One Nation party has campaigned against debanking and CBDCs.

More than a decade of inaction on crypto

Australia’s first parliamentary inquiry into digital assets was held back in 2014, but there’s been more than a decade of regulatory inaction since. The industry says this has led to stagnation and a brain drain of talent to jurisdictions like Singapore and the UAE.

The former Liberal Government was considering the landmark Digital Services Act, based on the 2021 Senate Committee’s crypto recommendations, when it lost office in 2022. Despite ongoing consultations since, the ALP government, led by Prime Minister Anthony Albanese, hasn’t put forward any legislation to parliament.

But there has definitely been a vibe shift from the ALP recently, with Treasurer Jim Chalmers telling Cointelegraph that digital assets “represent big opportunities for our economy.”

”We want to seize these opportunities and encourage innovation at the same time as making sure Australians can use and invest in digital assets safely and securely with appropriate regulation.”

His office said exposure draft legislation would be released “in 2025” for consultation, introduced into Parliament “once that feedback has been considered” with the subsequent reforms “phased in over time to minimize disruptions to existing businesses.”

The shadow assistant treasurer, Luke Howarth, said the ALP has been slow to act because it didn’t have a blockchain policy when it was elected.

“It wasn’t until the FTX collapse that they acknowledged the need for regulation,” he told Cointelegraph. “The Albanese government initially promised it would put in place regulation by 2023 but have failed to draft legislation or give a clear time-frame for action. After three years, all that was offered to industry was a six-page placeholder document.”

He’s referring to Treasury’s March statement “on developing an innovative Australian digital asset industry.” It provides for the licensing of Digital Asset Platforms (DAPS), a framework for payment stablecoins and a review of Australia’s Enhanced Regulatory Sandbox.

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While short on detail, those aims are broadly similar to the crypto regulation priorities that Howarth outlines to Cointelegraph — the big difference being that the opposition has committed to a faster time frame. 

Przelozny praised the 100-day promise as “exactly the kind of urgency we need.”

If elected, the Liberal Party’s legislation is expected to take some of its cues from Senator Andrew Bragg’s private members bill in 2023 and some from the more recent work done by the Treasury.

The government steps up efforts

The Treasury has been quietly drafting legislation this year, which Goodey understands is “almost complete.”

“There’s been prioritization within Treasury, and I know that their team has almost doubled — the digital asset team — for writing that draft legislation. So, there has been an investment in that over the past six months.”

Przelozny characterizes the ALP’s approach as “cautious and methodical, but it’s been slow,” prioritizing consumer protection and risk management.

BTC Markets CEO Caroline Bowler said the election of a pro-crypto Trump administration and the UK’s draft regulations (released this week) likely forced both sides of politics to finally get serious.

”Australia has ground to make up, and I would anticipate this also being a factor in the savvy move by both parties,” she said. 

Stand With Crypto campaign and ASIC

The Stand With Crypto campaign is active in Australia but has been fairly low-key during the campaign, with a focus on debanking.

Coinbase managing director for APAC John O’Loghlen called on whoever wins the election to launch a “Crypto-Asset Taskforce (CATF) within the first 100 days.” This would include industry and consumer representatives to finally get crypto regulations over the line.

“If Australia doesn’t move now, we risk falling even further behind,” he told Cointelegraph.

“The next government must move beyond consultation and into legislation.”

The Australian Securities and Investments Commission (ASIC) is the local equivalent of the US Securities Exchange Commission (SEC). It released its own crypto regulatory proposals in December. 

Related: Trump’s first 100 days ‘worst in history’ despite crypto promises

Joy Lam, Binance’s head of global regulatory and APAC legal, told Cointelegraph she doesn’t expect ASIC to suddenly change direction if a new government comes in, as the SEC did.

“ASIC doesn’t make the law,” she said. “I don’t expect a complete kind of 180 because ASIC, it is independent, and it does have its own mandate, but it obviously operates within the legislative framework that the government is going to be setting.”

Who should single-issue crypto voters back?

In February, a poll by YouGov and Swyftx found that 59% of crypto users would vote for a pro-crypto candidate in the federal election above all other issues. That equates to around 2 million Australians and would be enough to determine the outcome of the election one way.

But the similarities between the major parties on crypto regulation are much greater than the differences. Goodey said both sides of politics have genuinely engaged with the industry about its concerns and priorities.

“You can see in some of the language with their media releases that they both released in March, April this year, that they are in agreement on what the industry issues are,” she said.

Owing to Senator Bragg’s campaigning on crypto, the industry sees the Liberal Party as more enthusiastic about digital assets, but after three years in government, the ALP looks to have arrived at roughly the same place.

Recent YouGov and Resolve polls suggest the government is likely to be reelected.

While internal Liberal polling suggests an ALP minority government is a genuine possibility, the major parties would have enough votes between them to pass bipartisan crypto legislation.

Whatever happens, 2025 looks like the year Australia will finally provide the crypto industry with the certainty it needs.

“For industry, the timing is really quite critical now because obviously it’s something that has been discussed and kicked around for quite a few years,” Lam said. 

“I would say that we are cautiously optimistic.”

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