Australia has started a public consultation on its own grading of crypto assets following the worldwide regulatory race. Four major product categories relating to the cryptocurrency business are proposed to be distinguished by national regulators.
The Australian Treasury published an advising paper on “token mapping” on February 3 and identified it as a crucial component of the government’s multi-phase reform programme for market regulation. It aims to direct the creation of policies that are “fact-based, consumer-informed, and innovation-friendly.”
The study suggests various fundamental definitions of everything encoded based on the “functional” and technology-neutral technique.
You define the fundamental ideas behind smart contracts, cryptographic networks, and cryptographic tokens at the first level. The Treasury envisions a cryptocurrency network as a distributed computer system that can house tokens. Information storage and user command processing are its two main tasks. The two most well-known public crypto networks, according to the report, are Bitcoin and Ethereum.
According to the definition of a cryptographic token, it is a piece of digital data that can be “exclusively used or controlled” by someone unrelated to the person who controls the host machines on which the token is registered. The research paper claims that one of the major characteristics that sets crypto tokens apart from other digital records is the idea of “exclusive use and control.”
The smart contract is published in a crypto network database and travels like computer code. includes brokers or agents conducting duties under agreements, arrangements, or other acts that are added to by brokers, agents, and crypto networks without commitments.
The article suggests classifying it into four categories of crypto-related items, starting with these straightforward definitions:
Services related to digital assets, such as lending and borrowing, trading in cryptocurrencies, money management, mining and betting as a service, gaming, and custody.
Intermediate cryptocurrency assets include: rights or licences to access activities or subscriptions, intellectual property, loyalty programmes, consumer goods and services, fiat currency, non-financial assets, and government bond coupons. These assets are the closest to a common definition of premium currencies. Stablecoins fall within this classification
Network tokens, a “new kind of currency,” are the foundation of the peer-to-peer payment system. Consider the value of your first bitcoin: BTC $23,421.
Existence of smart contracts can be rated as “moderate” to “general.” The former is utilised by the parties to do away with the necessity for a mediator; the former is used by the first intermediaries to supply the service.
Despite the fact that the paper only seeks to start a discussion about this classification and makes no legislative proposals, its authors believe that existing laws can be fairly easily designed to cover the majority of the cryptosystem where functionality is provided by open-source software, avoiding the need for the development of a brand-new legal system.
The Treasury won’t respond to comments until March 3. The publication of a comparable document on the prospective licencing and custody framework for cryptocurrencies in mid-2023 will be the next significant development in the national regulatory conversation.
The UK Treasury also released a consultation document on cryptocurrency legislation on February 1. The financial authority emphasised that the flexibility of the existing financial services and markets law to include digital assets rendered new legislation unnecessary.