In a groundbreaking move that could set a new global standard for regulating cryptocurrencies, the Australian Treasury published a document titled "Regulation of digital asset platforms.โ This document aims to incorporate cryptocurrency exchanges into Australia's existing financial services framework, providing the industry with more legitimacy and security.
Here are all the details you need to know.
Introducing 'Digital Asset Facilities'
The proposal introduces a new category of financial products called โdigital asset facilities.โ These are essentially agreements to hold assets facilitated by digital asset platforms. According to the document, "the business of holding significant values โโof digital assets or assets backing digital assets should be regulated."
This new category aims to meet the minimum standards applied to traditional financial products and services that involve the holding of assets.
The landscape is blurry
At a time when the distinction between traditional financial products and digital assets is becoming less clear, the risks of unregulated intermediaries holding assets have become a greater concern. The Treasury document says these challenges are even more significant in the "vertically integrated" structure of digital asset platforms, which often combine trading, custody and other functions under one roof.
Also read: Coinbase declared the EU, Canada, Brazil, Singapore and Australia as priority markets!
Notably, the Australian government's approach is different from that of the US Securities and Exchange Commission (SEC), which focuses on classifying tokens as securities. The Australian document recognizes that many digital assets are not financial products and suggests a more flexible regulatory approach. The main goal is to protect consumers from potential conflicts of interest, fraud, and credit risks that have plagued the cryptocurrency industry.
The importance of 'asset ownership'
According to the proposal, applying the existing regulatory framework directly to the unique nature of digital assets may not be the most effective approach. The document emphasizes that the risks and benefits of "asset holding" in the digital asset ecosystem are not unique and must be regulated to maintain market integrity.
A standard for the world
The Australian Treasury's regulatory proposal could become a model for other countries dealing with cryptocurrency supervision. It aims to strike a balance by creating a safe and reliable digital asset market, while keeping the doors open to innovation.
This is what is happening in the US: Congress and SEC Clash Over Crypto Regulations; Grilled Gensler Chair
