Coinbase Calls For Flexible Approach to Regulation in Australia
‘Given the constantly evolving nature of digital assets and blockchain technology, a fit-for-purpose regulatory regime must focus on outcomes,’ Coinbase said
Source: Shutterstock / Francesca Pianzola, modified by Blockworks
Digital asset exchange Coinbase has responded to the Australian Treasury’s “token mapping” exercise, expressing its support for the development of the country’s regulatory framework.
Australia’s token mapping, in what is said to be a “world first,” will seek to define various digital assets and bring them under the purview of appropriate regulators across the country. While the exercise had been planned for sometime this year, the launch is expected sometime next year.
Coinbase said in a consultation paper on Tuesday, it believes that a well-rounded framework should focus on outcomes as opposed to specific rules. Those rules should achieve a balance across a variety of regulatory objectives, it said.
“Given the constantly evolving nature of digital assets and blockchain technology, a fit-for-purpose regulatory regime must focus on outcomes,” the exchange said.
Coinbase’s involvement in the project follows more than a year after the exchange expanded its services to Australian retail investors via its domestically-registered business, Coinbase Australia Pty Ltd.
While the exchange had offered the sale of digital assets to individuals as early as 2016, buying and selling crypto through a local arm was done via its main platform in the US.
The objectives, as alluded to in the paper, entail preserving financial stability, market integrity and consumer protections while fostering “responsible” innovation and growth.
Coinbase also highlights the importance of blockchain technology generally, including its potential to enhance efficiency, transparency and resiliency to the financial system by cutting down on middlemen. That in turn would cut costs, improve the user experience and increase competition, it said.
The exchange also takes particular note of fiat-backed stablecoins, while highlighting the benefits decentralized finance (DeFi) can bring to the table by exponentially expanding opportunities for financial players.
“Regulators have historically overseen financial markets by imposing and enforcing rules on market intermediaries,” Coinbase said. “No such intermediaries exist in the DeFi ecosystem.”
It comes as Coinbase has been sparring with the US SEC regulator for allegedly violating securities laws and selling unregistered products to retail and institutional investors.
The agency issued the exchange a Wells notice — a type of forerunner to formal action — notifying Coinbase of its intentions to probe its $2.5 billion business model. Coinbase said it would fight the SEC in court over the matter in a bid to clear itself of any wrongdoing.
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