Australian authorities outline regulations roadmap for cryptocurrencies and digital asset companies
The approach focuses on mitigating the use of cryptos in illicit activities like fraud and money laundering
Further policy consultation has been approved as well and could introduce new financial laws
The development comes and crypto popularity and adoption have reportedly grown significantly in Australia
The cryptocurrency industry in Australia could be on the verge of receiving more comprehensive regulatory oversight as a top market supervisor has unveiled plans to introduce a standardized framework for the burgeoning digital economy.
Wayne Byres, the chairperson for the Australian Prudential Regulation Authority (ARPA), published a letter on Thursday (April 21, 2022) outlining the watchdog’s expectations regarding curbing the risks associated with digital assets.
The document explains that regulated entities must understand and disclose the full extent of all activities and financial product offerings related to crypto. In addition, ARPA expects these companies to feature robust risk management systems and deliver concise accountability reports to regulators upon requestions.
According to the official statement, the operational risks considered by ARPA include cyber fraud, illicit conduct, and compliance with international established anti-money laundering (AML) policies, to name a few.
APRA, therefore, expects that all regulated entities will adopt a prudent approach if they are undertaking activities associated with crypto-assets, and ensure that any risks are well understood and well managed before launching material new initiatives.
Byres’ letter also confirmed that tokenized traditional assets, blockchain-powered currencies like stablecoins, and other unbacked crypto-assets will fall under the purview of the proposed policies.
Furthermore, the documents disclosed an ongoing consultation process by the Basel Committee geared towards overseeing deposit-taking institutions (ADIs) and managing how much exposure traditional banking institutions have to digital assets.
Crypto On The Rise In Australia
Recently, Australia has emerged as a hub for digital innovation and possibly a crypto-friendly jurisdiction. One of the biggest cryptocurrency exchanges FTX announced the launch of its services to investors in the country.
The country has also made headlines in the past few days due to the launch of Bitcoin Exchange-Trade Funds (ETFs) set to go live on April 27. The ETFs were recently approved by authorities and the first will be launched by Cosmos Asset Management.