Australia’s Treasury is working with the ASIC on these rules
The rules will clarify the status of stablecoins as well
The ASIC is presently reviewing feedback on the proposed reforms
In 2023, Australian banks reduced support for "risky" exchanges
Photo Credit: Unsplash/ Amber Weir
The Australian government has proposed a regulatory framework to oversee crypto exchanges, custody services, and brokerage firms. The Australian Treasury Department is working with the crypto industry to seek inputs on required regulations. In a statement released on Friday, March 21, Australia said it wants to help the virtual digital assets (VDAs) industry to grow while mitigating potential risks. The development comes about two months ahead of Australia's federal elections, that is slated for May 17.
The new crypto rules in Australia will lay focus on governing the digital assets platforms (DAPs), the Treasury department said in its statement. The Australian Securities and Investments Commission (ASIC) is also part of this regulatory process.
“The new DAP regime will not impose a new regulatory burden on digital asset issuers themselves, or on businesses that create or use digital assets for non-financial purposes. The aim is to mitigate key risks for consumers so the sector can safely and securely innovate and grow,” the Australian financial authority said.
The Australian Treasury department under Treasurer Jim Chalmers has outlined four primary focus areas for this legislation.
Apart from regulating the DAPs, the rules will establish stablecoins as a type of Stored-Value Facility (SVF) governed under the government's payments licensing reforms. SVFs are payment services that let users store funds for making future payments, as per the Reserve Bank of Australia. Some examples of SVFs are pre-paid cards, ornaments, and gift cards among others.
The rules will additionally explore ways to review Australia's Enhanced Regulatory Sandbox and lay out a suite of initiatives to investigate ways to use VDAs in economic growth.
The regulations will be implemented across trading platforms, custody products, and some brokerage arrangements. Businesses like foreign entities, providing specified services like operating DAPs and issuing tokenised SVFs will also be governed under these guidelines.
“Businesses that assist customers acquiring non-financial product digital assets will be excluded from obligations in specified circumstances. Small-scale and start-up digital asset platforms that do not meet the relevant size thresholds will be exempt from full obligations but may be subject to tailored compliance requirements,” the Treasury noted.
The Australian government plans to implement the reforms this year, while ASIC reviews feedback on the proposals. A timeline will be provided for businesses to align with the new rules.
If the ruling Labor Party retains power after the elections, it aims to develop a Crypto Asset Reporting Framework (CARF), advance Australia's CBDC, and explore tokenisation and DeFi use cases.
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