In a recent meeting, Rhys Bollen, head of the digital assets division of the Australian Securities and Investments Commission (#ASIC ) made a controversial comparison, calling Bitcoin "like tobacco used as currency in prison." This statement came as ASIC is discussing the application of the Non-Cash Payment Facility (NCP) law to digital assets, provoking strong reactions from the crypto community.
NCP Law and Concerns
NCP is a regulation related to cashless payment methods, including digital wallets, credit cards, and cryptocurrencies. ASIC believes that digital assets, especially #stablecoin could be classified as financial products if used for payment. This may force tools like wallets #metamask or other trading support software to comply with strict financial regulations.
Michaela Juric, a representative of the stablecoin AUDD project, warns that this perspective could have serious consequences:
• Hindering technological innovation: Companies that do not want or cannot meet legal requirements may exit the Australian market.
• Putting pressure on users: For example, if MetaMask is classified as a financial service, it will need a financial services license (AFSL) to continue operating in Australia.
Moves from ASIC and the Australian Government
ASIC recently issued consultation document INFO-225, including 13 examples of how digital assets such as stablecoins, staking services, and tokenized securities may be considered financial products. The government is also regulating digital asset intermediaries through the financial services licensing framework.
Important proposed changes:
• Risk management: Strengthening security protocols such as cold storage, geographical key backup, and multi-signature transactions.
• Implementation timeline: Businesses can apply for a #AFSL license to receive a grace period before facing legal liability.
Community feedback
Bollen's remarks have sparked significant debate in the industry. Some experts warn that these regulations will increase legal burdens, driving many businesses out of the Australian market. At the same time, the lack of clear boundaries in definitions could create uncertainty for crypto projects.
The public can submit feedback on document INFO-225 until February 2025, before official guidance is issued at the end of the year.
Conclusion
These controversies not only reflect the tug-of-war between regulation and innovation but also highlight the challenge faced by the Australian government in shaping a legal framework that protects users while not stifling the growth potential of the cryptocurrency industry.
