- Australia‘s Treasury focuses regulation on digital asset service providers with custody of client assets rather than cryptocurrency issuance itself.
- Stablecoin regulations will align with existing “stored value facility” rules, similar to the EU’s e-money approach.
- DeFi regulations are postponed while Australia monitors global regulatory developments.
Australia’s Treasury has unveiled its regulatory framework for digital assets, prioritizing oversight of platforms that hold customer funds rather than the cryptocurrencies themselves. The recently published plans target exchanges, custodians, brokers, and stablecoin issuers while deliberately avoiding immediate regulation of decentralized finance.
The regulatory scope encompasses digital asset providers (DAPs) with custody responsibilities and entities "providing specified services, such as operating and dealing in DAPs." This approach reflects Australia’s focus on consumer protection at points where investors might be most vulnerable—when third parties control their assets.
Cryptocurrency exchanges face specific disclosure requirements when listing assets without identifiable issuers. This transparency measure aims to help investors better understand the risks associated with truly decentralized tokens.
The framework includes proportionality measures, with smaller trading venues eligible for certain exemptions. However, these platforms must still demonstrate baseline compliance with regulatory standards, ensuring a balanced approach that doesn’t stifle innovation while maintaining protective guardrails.
Several categories fall outside the regulatory perimeter, including non-financial NFTs (such as in-game assets), software development activities, and certain maintenance roles for digital asset infrastructure. This carve-out helps distinguish between financial and non-financial applications of blockchain technology.
Stablecoin Approach Mirrors International Standards
For stablecoin regulation, Australia is aligning with established financial concepts. The Treasury plans to regulate stablecoins under existing "stored value facility" (SVF) frameworks—Australia’s equivalent to e-money. This mirrors the European Union’s approach, which classifies stablecoins as e-money tokens requiring similar licensing as traditional e-money providers.
Australia’s lighter touch on cryptocurrency issuance may stem from the securities regulator ASIC’s previous guidance clarifying which digital assets qualify as financial products. Late last year, ASIC provided classification frameworks that brought many cryptocurrencies under existing securities laws.
The Treasury’s forward-looking agenda includes exploring an expanded regulatory Sandbox to foster controlled innovation. Meanwhile, the Reserve Bank of Australia (RBA) continues collaborating with the Digital Finance Cooperative Research Centre (DFCRC) on wholesale central bank digital currency (CBDC) research and asset tokenization initiatives.
While DeFi regulation remains on hold pending global consensus, Australia’s approach reflects a measured strategy that addresses immediate consumer protection concerns while allowing time for more complex decentralized models to mature alongside international regulatory standards.
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