Why 2025 will be Australia’s first ‘crypto election’

This is the first federal election where crypto is being taken seriously by both major parties. And in the few short years since the last election, crypto adoption has gone mainstream.

2025 could be Australia’s ‘first crypto election’, says Binance’s Joy Lam. Pic: Getty Images

Special Report: This is the first federal election where crypto is being taken seriously by both major parties. And in the few short years since the last election, crypto adoption has gone mainstream.

Words by Joy Lam, Binance’s head of global regulatory and APAC legal

Today, it is estimated 1 in 3 Australians currently own cryptocurrency. This uptake underscores the growing influence of crypto-savvy voters and why cryptocurrency is such an important policy area for the next government to get right.

Donald Trump's embrace of crypto in the 2024 US election shows the power of the community.

His campaign actively courted crypto investors, accepting donations in Bitcoin and trumpeting the creation of a national digital asset strategic reserve, strongly positioning himself as an ally of the industry. This saw a shift to crypto policy garnering mainstream attention.

For Australia, this presents a potential roadmap. Rather than being a regulatory afterthought, regulation and support of the digital assets sector can become a mainstream discussion.

The federal government last month revealed its planned roadmap in a Statement on Developing an Innovative Australian Digital Asset Industry, which overtly called out the opportunity digital assets and blockchain presents for the Australian economy, payment sector, payments industry and capital markets.

Binance Australia has long been a strong advocate for greater regulation of the digital assets sector in Australia. This paper is welcome recognition and a strong foundation in giving both users and providers clarity.

Here are four elements of the statement we believe are important to positioning Australia as a global leader in the future digital economy.

• Align to global best practice

It has never been more important for Australia to introduce a formal regulatory framework that both protects consumers and fosters innovation.

We strongly believe it is critical that such a framework is consistent with existing global standards. Aligning with international regulatory approaches would foster cross-border regulatory consistency and reduce compliance costs.

We don’t need to re-invent the wheel here. Synergies with other markets would help Australia remain competitive in the global digital asset space by ensuring regulatory coherence with key financial jurisdictions.

• More rigorous oversight

A long-held concern for crypto users has been ensuring the safety and security of their digital holdings. There are over 400 digital currency providers registered in Australia alone.

The collapse of FTX in 2022 demonstrated the profound impact a single event can have on investors – causing not only significant financial losses but also a deep erosion of confidence in the sector.

The plan unveiled by the government would mean cryptocurrency exchanges are covered by a digital asset platform regime, leveraging the existing Australian Financial Services Licence (AFSL) framework to ensure all platforms and providers are subject to obligations of security and fairness that apply to all financial firms.

This approach formalises the way much of the industry already operates. We are already subject to strict AUSTRAC Know Your Customer (KYC) rules and are licenced by ASIC. This proposed approach further strengthens these existing protections for users while still encouraging competition.

• Getting banks back on board

De-banking is another issue specifically called out by the government as an area to address. De-banking, which occurs when a bank declines to provide services without any clear reasons, is a challenge both in Australia, and around the globe. It is an important one to get right.

Crypto, and the digital assets sector, was founded on the concept of democratising finance. Enabling financial transactions to happen instantly and securely at a fraction of the cost we’ve become accustomed to in traditional banking.

De-banking adds significant friction to the buying and selling of digital assets, discouraging many, or worse still, sending others to transact in unregulated foreign jurisdictions.

The government’s commitment to continuing to engage on this issue – including with the big 4 banks – is a welcome necessity. It is important for the government, banks, and industry to come together to find a balance between maintaining financial security and promoting fair competition.

• Encouraging innovation across the sector

In a fast-moving sector like crypto, the foundation of a robust regulatory framework must be built on basic principles of maximising protections for users while fostering a safe and sustainable ecosystem that can grow responsibly.

Getting this balance of protection versus innovation right is important.

To this end, the proposal for an enhanced regulatory sandbox as an environment to test new financial products and services is a much-needed development.

We have seen regulatory sandboxes work well in other segments of the financial services sector. We want to encourage innovation in Australia's digital asset sector and a sandbox or phased compliance approach for digital asset firms, particularly startups and DeFi developers, would enable businesses to innovate while working towards regulatory clarity.

As the world’s leading cryptocurrency exchange, we support the vision to align local regulations to global best practice to ensure Australia remains at the forefront of crypto adoption and innovation.

The government releasing this paper ahead of the federal election demonstrates a coming of age where crypto is now a topic of relevance for policymakers.

Whichever party wins the election and forms government one thing is clear, the time for words and discussion papers is over. Regulation is a must if Australia hopes to attract investment, remain at the forefront of digital innovation, and most importantly, protect local investors from bad actors.

For any financial provider, doing the right thing is critical, and having a clear framework in place provides a roadmap we can all follow.

The views, information, or opinions expressed in the interviews in this article are solely those of the contributing author and do not represent the views of Stockhead.

This article was developed in collaboration with Binance, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

Originally published as Why 2025 will be Australia’s first ‘crypto election’