Australia’s government has published a token mapping consultation paper and plans for stakeholder responses by 3rd March 2023.

The initiative was first unveiled in August last year, some three months after Prime Minister Anthony Albanese's new government took office, stating it was taking a “more serious approach to work out what is in the ecosystem and what risks need to be looked at first.”

“Token mapping is the process of identifying the key activities and functions of products in the crypto ecosystem and mapping them against existing regulatory frameworks,” the paper states.

Since the collapse of the FTX Exchange, authorities in Australia have been clamping down on numerous firms after not having acted on prior concerns over FTX, CoinDesk reports. At the end of last year, Australia announced it would outline a framework for the licensing and regulation of crypto service providers this year. 

“Australia’s token mapping exercise is the first of its kind by a national government, going back to first principles to understand crypto and map it to an existing regulatory framework,” according to senior policy advisor at blockchain intelligence firm TRM Labs, Angela Ang. That said, it remains to be seen how the country would tackle DeFi (decentralised finance), Ang went on to say. 

In addition, the token mapping consultation paper published plans involving the regulation of cryptocurrencies.

The aim is to “release a (separate) consultation paper proposing a licensing and custody framework for crypto asset service providers in mid-2023” because “after token mapping, licensing and custody reforms are the logical next step for crypto reforms in Australia.”

The objective of the consultation paper is to ascertain the requirements and operational standards for crypto asset service providers and ways in which they hold clients’ assets.

The government will be seeking comments surrounding its role in regulating the crypto ecosystem, how to avoid scams and likely investor safeguards. In addition, the country plans to complete its central bank digital currency (CBDC) pilot this year.