Australian corporate regulator plans to develop cryptocurrency policies based on outcomes.

The Australian Securities and Investments Commission (ASIC) is nearing completion of a series of regulatory reforms for the cryptocurrency sector, with a focus on desired regulatory outcomes. ASIC Commissioner Alan Kirkland outlined the organization’s strategy to promote responsible financial innovation during Blockchain APAC’s Policy Week on March 20. Kirkland emphasized the need to address the “regulatory trilemma” of consumer protection, market integrity, and financial innovation. The ASIC aims to enhance oversight and strike a balance between these factors in order to foster trust in crypto and decentralized financial systems. Since 2016, the ASIC has provided informal regulatory assistance to over 900 entities. Kirkland also mentioned that the ASIC has received proposals for tokenizing financial products and “real world” assets and explained that some forms of tokenization would be regulated under the current regime, while others would fall under the government’s digital asset platform proposal. By approaching innovation and regulation effectively, Kirkland believes that the ASIC can mitigate risks and promote digital assets to a wider audience. In October 2023, the Department of the Treasury published a consultation paper suggesting that crypto exchanges should obtain a financial services license from the local financial regulator. The proposed rules would require any crypto exchange holding more than 5 million Australian dollars ($3.2 million) or over AU$1,500 ($946) per individual to be licensed by the ASIC. While the proposal received mixed reactions from Australian crypto exchanges, the Treasury stated that the purpose of the consultation paper is to gather feedback on the various questions and regulations outlined within it.