Australia Fintech Hub Status Solidifies Further with Planned Crypto Law Overhaul

Australia is taking decisive steps to cement its status as a leading global fintech hub by preparing a regulatory overhaul for the crypto industry. The Australian Securities and Investments Commission (ASIC) is set to release updated guidance within two months requiring many crypto asset firms to obtain licenses under corporations law.

Financial Review reported this development on Monday.

ASIC commissioner Alan Kirkland is expected to emphasize Australia’s proactive approach to crypto regulation and share that licensing requirements will extend beyond digital currency exchanges. Most major crypto assets are already captured by the Corporations Act, as per the ASIC. It defines “financial products” as facilities enabling financial investment, risk management, or non-cash payments.

“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,” Kirkland said ahead of his appearance at The Australian Financial Review Crypto and Digital Assets Summit in Sydney. “This is because we think many widely traded crypto assets are a financial product,” he added.

Regulatory Clarity and Innovation: Australia Fintech Leadership Journey

By providing regulatory clarity, Australia aims to create an environment that fosters fintech innovation and attracts global investment. The government is drafting legislation requiring crypto exchanges to hold financial services licenses, as well as set rules for digital asset custody. It reportedly aims to reduce investor risks in Bitcoin and Ethereum.

ASIC will also update its “Information Paper 225” by November, and offer guidance on how to treat particular crypto tokens and products.

In February, the Federal Court ruled that start-up Block Earner should have registered as a managed investment scheme. On the other hand, the ASIC is appealing decisions involving Block Earner’s penalty and Finder Wallet’s licensing requirements.

ASIC’s regulatory stance aligns with the Reserve Bank’s recent proactive approach toward blockchain technology in commerce. Deputy Governor Brad Jones hinted at creating a digital Australian dollar for bank settlements using crypto technology. Jones said it could potentially save billions annually by streamlining financial markets and enhancing Australia’s competitive edge.

While acknowledging blockchain’s potential positive impact, Kirkland cautioned that crypto assets remain high-risk and speculative investments. ASIC’s primary concern is mitigating consumer harm and market misconduct, with licensing protections bolstering consumer confidence and market integrity. Both are crucial elements to fostering financial system innovation and attracting global fintech players to Australia.

Australia’s approach to crypto regulation mirrors global trends, with regulators like the U.S. Securities and Exchange Commission (SEC) also grappling with enforcement amid legislative ambiguity.

The SEC has sued major U.S. crypto exchange Coinbase for offering unregistered securities and delayed approving bitcoin ETFs before ultimately allowing listings in January.

Gairika holds positions in BTC. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

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