What's happened
Australia is advancing new legislation requiring digital asset platforms to obtain an Australian Financial Services License and register with ASIC. The move aims to increase transparency and trust in the crypto industry, while existing regulations also cover AML/CFT compliance and tax treatment of crypto assets.
What's behind the headline?
The proposed legislation signals Australia's intent to formalize crypto regulation, potentially boosting industry credibility. Requiring platforms to register with ASIC and adhere to AML/CFT rules will likely increase compliance costs but also foster greater consumer confidence. The distinction between custodial and non-custodial wallets highlights a nuanced approach, balancing regulation with user control. However, the evolving legal landscape may cause some platforms to delay or limit offerings until final laws are enacted. This regulatory push aligns with global trends toward stricter oversight, which could position Australia as a more trustworthy crypto hub, but also risks stifling innovation if compliance becomes overly burdensome.
What the papers say
Business Insider UK reports that draft legislation will require crypto platforms to obtain an Australian Financial Services License and register with ASIC, emphasizing increased transparency and trust. The article notes that current laws do not inherently regulate crypto as a financial product, but new rules may change that. The Independent highlights the development of a new NYSE platform for tokenized securities, illustrating broader institutional interest in blockchain-based assets. Both sources underscore the growing institutional and regulatory focus on crypto and tokenization, with the Australian legislation fitting into this wider context of increased oversight and integration of digital assets into traditional finance.
How we got here
In September, Australia proposed draft legislation to regulate crypto platforms more strictly, distinguishing custodial from non-custodial wallets. Currently, crypto is not classified as a financial product unless linked to securities or ICOs. The new rules aim to raise compliance standards, with some exemptions for small platforms, amidst ongoing regulatory uncertainty.
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