- Crypto exchanges would be needed to apply for a license from the ASIC.
- The paper advises a token mapping exercise be completed by the end of 2023.
Recently, the Australian government announced its intention to license cryptocurrency exchanges as a means of regulating the digital asset market. The policy shift has consumer protection and innovation in the crypto sector as its stated goals. Concerns have been raised by certain exchanges, however.
On October 16, the Australian Treasury released a discussion paper titled “Regulating digital asset platforms.” To mitigate consumer damages and systemic hazards in the digital asset industry, this paper lays forth a suggested regulatory structure for crypto exchanges and service providers.
License Mandatory
The paper suggests that rather than creating new laws for cryptocurrencies, the current standards for financial services be applied to cryptocurrency exchanges.
Moreover, in this model, cryptocurrency exchanges would be subject to the same regulations as any other financial institution and would need to apply for a license from the Australian Securities and Investment Commission (ASIC).
The paper makes it clear that crypto exchanges and service providers, rather than specific cryptocurrencies or tokens, will be the primary targets of regulatory action. Also, payment tokens, utility tokens, security tokens, and stablecoins are only few of the crypto assets that are acknowledged. Some of these assets may not qualify as financial products under the Corporations Act, which is recognized in the paper.
The paper advises a token mapping exercise be completed by 2023’s end to solve this issue. The goal of this project is to categorize various crypto assets so that it can be decided whether or not they need to be regulated as financial products.
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