Proposed Legislative Framework for Digital Assets
In a bid to enhance consumer protections and clarify regulations for the fast-evolving crypto industry, the Australian government has unveiled a proposed legislative framework aimed at digital asset platforms. Announced on Wednesday by Assistant Treasurer Daniel Mulino during the Global Digital Asset Regulatory Summit, these reforms are intended to align Australia with international regulatory standards.
Key Features of the Proposed Changes
Mulino emphasized the significance of this bill, labeling it the “cornerstone” of the nation’s digital asset strategy introduced earlier this year. The proposed changes to the Corporations Act would introduce two new classifications for crypto entities: digital asset platforms and tokenized custody services.
To operate under this new framework, businesses will be required to:
- Acquire an Australian financial services license
- Implement mechanisms for resolving disputes
- Manage conflicts of interest
- Adhere to minimum standards regarding asset custody and settlement
Mulino pointed out that recent incidents in the crypto sector have revealed significant deficiencies in consumer protection, particularly when companies managed pooled client funds.
“By applying established Australian financial services regulations to the more high-risk areas of this industry, we aim to protect consumers and support legitimate enterprises,” he stated.
Addressing Emerging Trends
The legislation also addresses the treatment of wrapped tokens, public token infrastructure, and staking mechanisms, which often find themselves misaligned with existing definitions designed for conventional financial intermediaries. Acknowledging the rapid pace of innovation in technology, the proposed law allows regulators the flexibility to adapt their policies in response to emerging trends in digital services.
Mulino cautioned against overly rigid regulations that could hinder the growth of new businesses, stating,
“We have integrated provisions that allow for adjustments as technology evolves.”
Collaboration and Consultation
In preparation for the efficiency of these new rules, the government is collaborating with the Australian Securities and Investments Commission (ASIC) to initiate transitional measures before the new regulations take effect. Mulino assured that the consultation process with stakeholders will play a key role in refining the draft legislation, with clarity being a primary focus of feedback received from the industry.
