Australia’s securities regulator, the Australian Securities and Investments Commission (ASIC), has announced plans to implement stricter oversight of the cryptocurrency market in an effort to enhance consumer protection. The regulator has identified “practical licensing issues” surrounding stablecoins and wrapped tokens, prompting the release of Consultation Paper 381 on December 4.
ASIC Commissioner Alan Kirkland emphasized the importance of promoting responsible financial innovation while ensuring consumer protection. He stated that many digital assets and related products fall under current financial laws, and stakeholders have been calling for greater clarity on how these laws apply to cryptocurrencies. In response, ASIC plans to add 13 practical examples illustrating how current financial product definitions could be applied to cryptocurrencies and related products.
The consultation paper also includes suggestions for potential regulatory relief measures and transitional approaches for businesses adapting to the updated guidance. ASIC is considering a “no action” position for firms in the process of applying for or modifying licenses. Public feedback on the proposals is open until February 28, 2025, with ASIC aiming to finalize the guidance by mid-year.
In addition to regulatory oversight, Australia is also reviewing its approach to crypto taxation. The Department of Treasury is seeking guidance from the Organization for Economic Cooperation and Development (OECD) on two options: adopting the OECD’s Crypto Asset Reporting Framework or tailoring it to domestic needs. The framework aims to enhance tax transparency by collecting data on crypto transactions, including purchases over $50,000, and sharing it with global authorities.
Overall, Australia’s move towards stricter oversight of stablecoins and wrapped tokens reflects a broader trend towards increased regulation and transparency in the cryptocurrency market. By addressing regulatory gaps and ensuring compliance with financial laws, ASIC aims to create a well-regulated financial system that benefits both consumers and the wider community.