Australian senator proposed licenses for crypto exchanges, custodians and stablecoin issuers

Australian opposition Senator Andrew Bragg released the draft Digital Assets (Market Regulation) Bill 2022 for consultation on September 19, 2022, proposing federal licenses for digital-asset exchanges, custody providers and stablecoin issuers.

The proposal also addressed a different form of digital money: China’s central-bank-issued digital yuan. Bragg wanted designated banks operating in Australia to report information about facilitating its domestic use. The combination placed private crypto markets, asset custody, stablecoins and a foreign central bank digital currency inside one proposed regulatory framework.

The distinction between a draft and enacted law was fundamental. Bragg was a Liberal senator from New South Wales whose party had lost government in May 2022. The document was a prospective private member’s bill released for feedback, not legislation introduced by Australia’s Labor government, passed by Parliament or administered by a regulator. CoinDesk reported that consultation was scheduled to close on October 31, 2022.

Three proposed licensing gates

Contemporaneous accounts identified three principal licensing categories: digital-asset exchanges, digital-asset custody services and stablecoin issuers. ABC reported that the draft would make issuing a stablecoin without a license an offense and would require reserve capital intended to address redemption risk.

That focus followed the failure of TerraUSD, an algorithmic stablecoin that lost its intended one-dollar peg in May 2022 as its associated LUNA token collapsed. The episode had demonstrated that the word “stablecoin” did not establish the existence, liquidity or legal protection of reserves. Bragg’s proposal sought to move issuance and reserve obligations into a licensing structure rather than relying exclusively on an issuer’s design and representations.

Exchange and custody licensing addressed a separate institutional problem. A trading platform could hold customer assets, arrange transactions and provide wallet infrastructure while falling only partly within rules designed for conventional financial products. A dedicated license could impose entry and operating requirements, but the September 19 draft did not itself create supervisory capacity or prove that licensed firms would be failure-proof.

The digital-yuan provisions

CoinDesk reported that the draft identified seven Chinese banks with Australian branches as potential facilitators of the digital yuan. Proposed disclosures included the number of Australian businesses accepting digital-yuan payments facilitated by a designated bank and the amount held in Australian customers’ wallets.

Bragg framed those provisions as economic and national-security monitoring. That was his policy argument, not a verified finding that the digital yuan had already achieved widespread Australian use. On September 19, the proposal established neither adoption totals nor evidence of an imminent nationwide launch in Australia.

The Reserve Bank of Australia was meanwhile pursuing a separate, limited-scale Australian CBDC research project with the Digital Finance Cooperative Research Centre. The RBA had announced on August 9 that the ring-fenced pilot would examine use cases and would involve a pilot CBDC representing a real claim on the central bank. That research did not amount to a decision to issue a retail Australian digital dollar.

A competing regulatory route

Bragg’s draft arrived while the Labor government was developing its own approach. On August 22, the government said Treasury would prioritize “token mapping” during 2022 to identify crypto assets, services and gaps in existing law before determining the regulatory framework. The government also identified exchange licensing, custody obligations and consumer safeguards as areas for further work.

The overlap showed that licensing and custody were not confined to one party’s agenda, but the sequencing differed. Bragg argued for putting a legislative model into consultation; the government said classification and mapping should precede detailed rules.

For the September 19 record, the verified development is therefore narrow but significant: an Australian senator published a concrete consultation draft spanning exchanges, custodians, stablecoin issuers and digital-yuan facilitators. It opened a regulatory pathway for debate. It did not change any firm’s legal status, authorize a stablecoin, guarantee reserves or establish that Parliament would adopt its terms.