Work on an Australian regulation regime for cryptocurrency is expected to step up next year.

Assistant Treasurer Stephen Jones said about one million Australians had invested in what he described as a “very opaque market”.

“We need to be regulating in the cryptocurrency sphere,” he told ABC radio on Thursday.

“There are lots of scams going on.”

Mr Jones said it was difficult to understand exactly what needed to be regulated, as the term “cryptocurrency” covered many distinct products.

This was why the government has announced a process to map the tokens and “get under the hood of all of these cryptocurrencies and understand what they are and what they’re doing”.

A token is essentially a tradeable denomination of a cryptocurrency that can be invested or spent.

The minister said he expected to publish a consultation paper in November, ahead of work on a set of regulations.

“I’d anticipate that next year we’d be in a position to be starting to contemplate these things,” he said.

In June, the Council of Financial Regulators declared it was important to have a “robust regulatory framework to protect investors and guard against potential financial stability risks”.

The regulators also discussed rising interest in stablecoins and the need for new laws.

Banks are keen to use the digital coin, which can be linked to a real asset such as the Australian dollar, as a new way to store value and settle transactions.

The council is due to release its next quarterly statement on Tuesday.

Paul Osborne
(Australian Associated Press)