Australian regulators are preparing a new legislation that will require crypto exchanges to obtain financial services licenses.
This move extends beyond the current licensing requirements related to digital currency exchanges.
Expanded requirements for crypto industry
Alan Kirkland, the Australian Securities and Investments Commission, or ASIC’s commissioner shared that the new requirements are necessary because the regulator considers most major crypto assets like Bitcoin and Ethereum to be captured by the Corporations Act.
Kirkland disclosed the authority’s plans in an ongoing crypto conference, at the AFR Crypto and Digital Assets summit in Sydney.
Regulatory guidance delivers clarity
The ASIC is preparing to update the Corporations Act’s Information Sheet 225 to provide more clarity on how particular crypto tokens and certain products should be treated from a regulatory perspective. This update is expected to be issued by November this year.
“ASIC’s message is that a significant number of crypto asset firms in the Australian market are likely to need a license under the current law. This is because we think many widely traded crypto assets are a financial product.”
Industry progress and investor protection
This move by Australian regulators wants to provide more clarity and oversight in the crypto market.
By requiring exchanges to hold financial services licenses, the government hopes to protect investors better and ensure compliance with existing laws.
But as many industry participants warn, this change may also present challenges for crypto firms operating in Australia, as they will need to comply with the new licensing requirements, and this means more administration.
It remains to be seen how the updated legislation will impact the growth and adoption of cryptocurrencies in Australia.
If other countries follow suit with similar regulatory measures, it could finally lead to a more standardized approach to crypto oversight globally, as there are already suggestions for this.
