Australia’s ASIC seeks stricter oversight of stablecoins, wrapped tokens

Australia’s securities regulator has unveiled proposals for tighter supervision of the crypto market aimed at improving “consumer protection”.

Australia is moving to tighten its oversight of cryptocurrencies, citing “practical licensing issues” with stablecoins and wrapped tokens.

In a press release dated December 4, the Australian Securities and Investments Commission announced Consultation Paper 381, which outlines plans to address regulatory gaps in the crypto industry and ensure compliance with existing financial laws.

ASIC Commissioner Alan Kirkland said the regulator wanted to encourage the growth of “responsible financial innovation” while “ensuring consumer protection”, adding that a “well-regulated financial system” benefits everyone in society.

“Many digital assets and related products are financial products under current law. “Stakeholders have been demanding greater clarity and we are publishing our updated draft guidance in response.”

Alan Kirkland

The securities watchdog wants to include 13 practical examples of how “existing financial product definitions” can be applied to cryptocurrencies and related products.

The consultation document also includes recommendations on potential regulatory mitigation measures and transition approaches for businesses complying with the updated guidance, the press release states. ASIC is also investigating “no action” for firms in the process of applying for or changing a licence.

Public feedback is open until 28 February 2025, with ASIC planning to complete INFO 225 by mid-year.

Meanwhile, Australia is also reviewing its approach to crypto taxation, with the Treasury Department seeking guidance from the Organization for Economic Co-operation and Development. As crypto.news previously reported, the Treasury is considering two options: adopting the OECD’s CryptoAsset Reporting Framework or adapting it to local needs. CARF aims to increase tax transparency by collecting data on crypto transactions, including purchases over $50,000, and sharing them with global authorities.