A Collaborative Regulatory Crypto Approach: What the U.S. Can Learn from Australia

By Aaron Feuerstein October 26, 2023 In Australia, United States
Image: Shutterstock
  • Regulation by enforcement does not work and drives innovation elsewhere.
  • Crypto is here to stay and needs clear rules, and Australia is taking a measured, consultative approach.
  • Bad actors need to be weeded out, but overall many exciting things are happening.

With crypto regulation in the United States being a political issue, one with which lawmakers struggle to come to terms, other countries are more proactive. Here in Australia, the Treasury has revealed plans to regulate cryptocurrencies and exchanges. While the proposal received a mixed response from the industry, it has at least started the conversation.

Lack of Regulation Can Push Innovation Away

The CEO and co-founder of Banxa, Holger Arians, spoke in a recent interview about how the U.S. could learn from Australia. Arians’ interviewer and Roundtable host, Rob Nelson started off by claiming that regulators are often not up to speed with technology, saying,

They’re old school. We’re in the new school.

Rob Nelson

Referring to the regulatory approach in the United States, he highlighted what many before him have said, that crypto can’t be stopped by enforcement regulations, but the U.S. risks pushing innovation offshore.

Arians stated that he would not set up a crypto business in the U.S. due to the lack of clarity, he added,


Tell us what the rules are. Don’t tell us we broke them after the fact.

Holger Arians

Which he rightfully thinks is a very reasonable request.

He added that the industry is ready to push boundaries and innovate but regulation by enforcement is not the right approach and agreed it will drive innovation to other jurisdictions especially Singapore, Hong Kong and the Middle East.

Australian Approach as Blueprint?

Arians highlighted that in Australia, the government has taken a proactive approach to cryptocurrency regulation over the past few years. He commended the collaboration between the industry and regulators in Australia, noting frequent roundtable discussions to refine the framework.

The Banxa CEO stated that his primary expectation from regulation is clarity and fairness.

He added,

I think you can solve it with collaboration and not enforcement and we’ve seen that here in Australia. It’s a great example.

Holger Arians

While bad actors should face consequences, the broader industry needs supportive regulation, as it provides trust and fosters mainstream adoption. Comparatively, places like Hong Kong are emerging as Web 3 hubs, offering robust regulatory support and infrastructure.

With the global race in crypto regulation intensifying, Arians emphasised that it’s essential for governments to participate actively. He said Europe’s recent crypto assets regulations are a positive step, and he is hopeful the US will also join these constructive efforts.

An Industry Set to Explode

Unsurprisingly, Arians argues that the approval of a Spot Bitcoin ETF in the United States will drive adoption.

He compared the crypto market to Apple, saying that the entire market is currently valued around a trillion dollars, which, while significant, is still a fraction of the valuation of major traditional companies.

His perspective underscores the immense growth potential of the crypto space. Many expect its impact will surpass even that of the internet. Arians believes we’re only at the beginning, merely scratching the surface of crypto’s potential.

He stated, “There’s already so much great stuff happening, but overall, we’re just scratching the surface of the possibilities and that’s why I’m super excited about the future and the next 5-10 years in this industry.”

Aaron Feuerstein

Aaron Feuerstein

Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.

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