To register as an exchange in Australia, all that is required is for an entity to register with AUSTRAC.
Alongside its banking partners, Coinbase is also working with Blockchain Australia’s program which aims to provide a digital exchange classification, or DCE, which would signal whether exchanges had been fully audited. This is not yet a regulated requirement for Australian-based crypto exchanges.
Mr O’Loghlen acknowledges Australia’s regulatory landscape lags those in Singapore, the United Kingdom and the United States, but argues the understanding of policy-makers has improved dramatically over the last few years.
“For a long time there was a pretty thin bench within Treasury, APRA, ASIC and the RBA, but I’ve been on a number of calls with these bodies recently and it’s been surprising to have so many crypto and digital native people asking the types of questions we’re getting asked in Brussels, Singapore, Washington,” he said.
“So while the current regime may look quite laissez fair or lacking, we believe the government does want to lean into the regulation. We’d just like that to happen a bit quicker.”
Coinbase has a tiered fee structure that clips the ticket on the “maker” and “taker” side. The “makers” – who provide liquidity – are charged between 0.05 per cent and 0.6 per cent per trade, while those who “take” liquidity are charged between 0.03 per cent and 0.4 per cent.
To establish the brand without confusion, Coinbase had deliberately avoided offering a fee discount or flooding inboxes with free tokens, Mr O’Loghlen said.
As it stands, Coinbase offers about 200 digital assets on its exchange, and Mr O’Loghlen said the bar for approving tokens had become progressively higher as the years passed with 90 per cent of tokens seeking approval rejected.
“We have a much better understanding about what a sustainable token or business model looks like now,” he said.
“The last thing we want is for a listing to have some initial pop and then teeter off into nothing. That’s not a good look for the web3 environment or for any of our retail, institutional or web3 businesses.”
One concern Mr O’Loghlen has regarding Australian regulation is around custody, and whether operators need to store assets in-country.
“That’s something we’re concerned about,” he said, but added that Coinbase would not pull out of the market if rules along those lines emerged.
Coinbase Ventures, the investment arm of the exchange, has made five early-stage investments in Australian crypto start-ups Immutable, CoFiX, Synthetix, Block Earner and CryptoTaxCalculator.