On Tuesday, the financial watchdog of Australia requested feedback regarding the revisions to its digital asset guidance.
It’s hoped that the changes will help people better understand how the Corporations Act 2001 applies to digital assets and help companies that offer related financial services.
The Australian Securities and Investments Commission (ASIC) put together a document with 13 real-life examples to show how current financial product definitions can be used for digital assets and related products.
The updated guidance will provide businesses with the process for obtaining an Australian Financial Services (AFS) license to manage digital assets classified as financial products. It also delineates the criteria that ASIC employs to evaluate license applications, emphasizing adherence to financial services laws.
The proposed revisions also define the ongoing responsibilities of AFS license holders about digital assets. The following are included:
- The management of risks
- The provision of essential disclosures
- The guarantee of the honest and equitable delivery of financial services
ASIC’s Draft Guidance Is Designed to Clarify the Legal Status of Stablecoins and Refocus ICOs
Additionally, the proposed changes aim to separate initial coin offerings (ICOs) from other digital asset distribution methods.
Additionally, the regulator solicits feedback regarding the classification of stablecoins and bundled tokens within the regulatory framework. The objective is to ensure that the guidance remains pertinent as the digital asset sector continues to develop and to clarify the legal status of these assets.
ASIC’s draft guidance will function as a “living document,” with frequent updates to reflect the latest developments in digital assets.
Australia Regulator’s Final Updated Digital Asset Regulations Expected by Mid-2025
The regulator requested feedback on critical matters, such as expected compliance expenses, the potential effects on competition, and other pertinent factors. It also solicited feedback on implementing a class-wide “no action” stance for digital asset enterprises applying for or updating an AFS, Australian Markets, or Clearing and Settlement Facility license.
“The regulatory framework for financial services in Australia is comprehensive and technology-neutral,” stated Alan Kirkland, the Commissioner of ASIC. “Under the current legislation, numerous digital assets and associated products are classified as financial products.” We are publishing our draft updated guidance in response to stakeholders’ demand for greater clarity.
“We strongly encourage all stakeholders to participate in the consultation process.” We acknowledge that the industry will require time to evaluate and implement our revised guidance; therefore, we are also conducting consultations regarding a potential transitional strategy.
Kirkland informed Protechbro in September that ASIC intended to issue new draft guidance shortly and solicit industry feedback on the modifications.
“ASIC is committed to ensuring that the current regulatory framework’s critical consumer protections are available to the millions of Australians who currently hold crypto-asset investments,” he stated.
The deadline for feedback on the proposed document is 5 p.m. on February 28, 2025. By mid-2025, ASIC intends to publish the ultimate revised guidelines.
