ASIC aims to regulate stablecoins and wrapped tokens to address licensing gaps.
New guidelines clarify how businesses can apply for an Australian Financial Services license.
ASIC promotes responsible innovation while ensuring crypto consumer protection.
The Australian Securities and Investments Commission (ASIC) is working to fill the void in the expanding digital asset industry. On December 4, ASIC published Consultation Paper 381, which describes ASIC’s position on the regulation of stablecoins and wrapped tokens. These new forms of digital assets have created what can be described as “practical licensing questions” that need more direction.
Financial Product Concepts
The consultation paper offers 13 specific illustrations of how financial product concepts can be applied to digital assets. Any company managing digital assets may require an Australian Financial Services (AFS) license. This requirement ensures that companies are within the right framework of Australian financial services laws and regulations, thus providing some legal certainty in the industry.
The new guidance will help companies better understand how to apply for an AFS license and what ASIC wants to see in an application. The main focus will be on the norms and standards of financial regulation. ASIC has made these changes to help provide more definition and thus lessen the impact on the operational aspects of the crypto business.
Responsible Financial Innovation
ASIC Commissioner Alan Kirkland made it clear that the regulator aims to promote ‘responsible financial innovation’ for the benefit of consumers. He noted that the above mechanisms benefit the financial system because they serve the community. “Many digital assets and related products are financial products under the current law”. He noted that stakeholders have asked for more detail, and the new guidance is intended to furnish it.
The step shows the country’s intention to follow the global trends in regulating the cryptocurrency industry. The new guidance and taxation rules point towards further extending control over digital assets. These steps are part of an ongoing effort to ensure that consumers are protected and that the financial health of the crypto environment is preserved. Through the current move to enhance the rules, ASIC is in a bid to ensure that the market for digital assets is safe and well-regulated for investors.
The post ASIC’s Bold Move: Tightening Control Over Crypto Assets appeared first on CryptoTale.