Australian corporate regulator plans to develop cryptocurrency policies focused on achieving desired results

The Australian Securities and Investments Commission (ASIC) is nearing completion of its efforts to develop and implement a series of regulatory reforms for the cryptocurrency industry. ASIC Commissioner Alan Kirkland revealed the organization’s strategy to promote responsible financial innovation during “The Brief – Open Forum” as part of Blockchain APAC’s Policy Week on March 20.
In order to address the challenges associated with financial innovations such as consumer protection, market integrity, and financial innovation itself, Kirkland emphasized the need to solve the “regulatory trilemma.” ASIC aims to build trust in cryptocurrencies and decentralized financial systems by enhancing oversight and finding a balance between these trilemma factors. Since 2016, the commission has already provided informal regulatory guidance to more than 900 entities.
Kirkland also mentioned that ASIC has received numerous proposals for tokenizing financial products and other real-world assets. Some of these tokenization projects will be regulated under the current regulatory framework, while others will fall under the government’s digital asset platform proposal.
By adopting an innovative and effective regulatory approach, Kirkland believes that ASIC can mitigate associated risks and facilitate the widespread adoption of digital assets.
In October 2023, the Australian Department of the Treasury released a consultation paper suggesting that crypto exchanges should be required to obtain a financial services license from the local financial regulator. Under the proposed rules, any crypto exchange holding more than 5 million Australian dollars ($3.2 million) or over AU$1,500 ($946) per individual would need to be licensed by ASIC.
While the proposal received mixed reactions from crypto exchanges operating in Australia, the Treasury clarified that the purpose of the consultation paper is to gather feedback on the various questions and regulations it presents.