Australian Financial Regulators Treatment Of Crypto-Assets

Within the wake of the drawn out cryptocurrency market downturn, elevated regulation of the sector appears inevitable. With almost a million Australians transacting in cryptocurrencies final yr, there have been widespread calls to enact further protections for retail traders.

This desk outlines key regulatory developments from Australian monetary regulators on doable remedy of crypto-assets.

The important thing priorities for regulators look like the safety of customers, upkeep of a good and environment friendly monetary system (together with in respect of crypto-assets), and the promotion of innovation and overseas funding in Australia. Accordingly, the Monetary Companies Minister, Stephen Jones, has not too long ago urged that the brand new authorities shall be reviewing crypto regulation as a part of the bigger digital funds system overhaul.

The important thing challenges for regulators shall be delivering on these contrasting and considerably competing aims. The prevailing framework for monetary markets is unlikely to translate properly into crypto exchanges.  A extra tailor-made strategy shall be obligatory to be able to ship on each the buyer safety and competitors goals.

The Council of Monetary Regulators (comprised of the regulators within the desk above, besides ACCC) has explicitly suggested banks in opposition to de-banking the crypto house and recognised the significance of a strong regulatory framework for this market. Additional, in its first interim report on monetary providers laws reform, the Australian Legislation Reform Fee briefly recognised cryptocurrencies as a brand new market in Australia. 

With extra Australians uncovered to this risky sector than ever earlier than, there is no such thing as a doubt that crypto-assets are actually a part of the mainstream monetary system (and maybe much less uncorrelated as was as soon as thought), and lots of organisations see advantages in making use of extra conventional regulatory supervision to this asset class.

The previous few months of crypto volatility has been instructive – exhibiting that market dangers are actual and can’t be ignored.