Australia Embraces 'Digital Assets' in Latest Crypto Regulation Update

ASIC Releases Crypto Regulation Update: Know What’s New

Australia’s financial watchdog is tightening its grip on the country’s cryptocurrency industry with novel regulatory efforts. In a bid to bring clarity to the industry, the Australian Securities and Investments Commission (ASIC) has released a new crypto regulation update.

Notably, this update replaces the outdated term 'crypto-asset' with 'digital assets', encompassing a wider range of virtual, tokenized, and coin-based products. It also outlines when virtual asset products and services fall under existing financial laws.

Australia Releases New Crypto Regulation Update

In the latest Australian crypto news, the regulator has released new regulatory guidelines, broadening the scope of existing financial laws to digital asset businesses. The revised version of Info Sheet 225 highlights the circumstances under which digital assets are likely to be classified as financial products under existing law. 

Significantly, the latest crypto regulation update swaps “crypto asset” for a more comprehensive term, “digital assets,” covering virtual, tokenized, and coin-based products without exception.

Although the guidance does not establish fresh laws, it aims to provide clarity for businesses ahead of the government’s planned Digital Asset Platforms and Payment Service Providers bills. These bills aim to introduce formal licensing requirements for exchanges, custody platforms, and specific stablecoin issuers, giving businesses more certainty in the regulatory landscape.

Interestingly, this regulation update comes as part of the country’s vision of becoming a global leader. A spokesperson from Swyftx exchange noted,

"The government has said it wants Australia to be a leader in virtual assets, but it's all about balancing consumer protections and innovation. We don’t want to end up with a big value transfer away from local consumers and businesses to offshore providers."

AFSL License for Cryptocurrency Platforms

In a new regulatory draft, the watchdog mandates virtual currency platforms to hold an Australian Financial Services Licence (AFSL) from ASIC. This makes them adherent to laws similar to those of banks and traditional institutions.

The new regulations introduce two categories: digital asset and tokenized custody platforms. Smaller platforms with annual transactions under $6.5 million or customer deposits below $3,300 are exempt from licensing, providing relief for smaller operators. Non-compliance could result in penalties of up to A$16.5 million or 10% of annual turnover.