According to the fintech head of Australia’s securities regulator, Blockchain and crypto are technologies that perform the same functions as the existing financial infrastructure, so they should not be treated as separate asset classes when drafting the law.
In a paper presented at the Melbourne Money and Finance Conference on Wednesday, Australian Securities and Investments Commission (ASIC) fintech chairman Rhys Bollen said crypto should be regulated as an “economic substance” rather than a technology.
Tokenized securities should fall under securities laws, and stablecoins should trigger payment services legislation, Bollen said, noting that other elements of crypto could be consumer protection laws.
Bollen’s approach contrasts with crypto-specific regulatory frameworks in other countries, such as the CLARITY Act in the US and the regulatory framework for crypto-asset markets in Europe.
Bollen argued that the three main financial functions – capital allocation, payments and risk management – have evolved with technological progress, and distributed ledger technologies such as blockchain should not be treated differently:
“Digital assets essentially represent new technological models of long-term financial activities. While the mechanisms of issuance, transfer and accounting have changed, the basic economic functions that these instruments serve have not changed.”
“Regulatory systems have repeatedly adapted to technological changes – from paper instruments to electronic records – without abandoning fundamental principles such as consumer protection, market integrity and systemic stability,” Bollen said.
Australia will not develop a large crypto bill
Australia is already starting to adopt this approach, Bollen said, with the main piece of crypto legislation, the Digital Assets Framework Bill, seeking to amend only parts of the Corporations Act.
“The bill does not abandon the existing financial services framework. Instead, it makes appropriate changes that integrate digital asset platforms into the established regulatory architecture.”
Australia’s crypto market has also been guided by ASIC Information Sheet 225, which states that the existing definitions of “financial product” and “financial service” in the Corporations Act may apply to digital assets.
“ASIC’s guidance clearly rejects the notion that digital assets constitute a discrete asset class for regulatory purposes,” Bollen said. “Instead, it confirms that a digital asset can fall within the scope of regulation where it acts as a security interest, a derivative, a managed investment scheme or a non-cash payment instrument.”
Bollen said focusing on “economic features rather than technology brands” would allow regulators to provide clearer rules to market participants while reducing “opportunities for regulatory arbitrage.”
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ASIC Information Sheet 225 also focuses on regulating intermediaries rather than tokens, and Bollen noted that most consumer harm in the digital asset industry has come from the behavior of cryptographic platforms that offer storage, trading, lending or income services.
Decentralized offerings are still difficult to configure
Bollen acknowledged that classification issues could arise with decentralized products or services, though he said the legal analysis should focus on practical controls and benefits rather than formal decentralization claims:
“If identifiable parties affect protocol design, governance, or economic outcomes, regulatory obligations can and should be attached.”
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