Ripple policy summit deliberates digital asset regulation in Australia and beyond
Ripple, the leader in enterprise blockchain and crypto solutions, held its first closed-door Australia policy summit in Sydney on 20 March 2024. Nearly 200 attendees comprising local and global regulators, policymakers, and key industry thought leaders were on hand for high-level discussions on regulatory developments in blockchain and digital assets in Australia and across the globe.
Former ASIC chairman and current Global Digital Finance co-chair and board member Greg Medcraft delivered the keynote address, followed by panel discussions with industry experts, including a former US Department of Justice prosecutor, members of the legal fraternity, banks and industry bodies.
Key highlights from the Summit:
Treasury’s proposal paper on regulating digital asset platforms, released in late 2023, proposes digital assets fall under the existing Australian Financial Services Licence (AFSL) framework, regulated by the Australian Securities and Investments Commission (ASIC). Exposure draft legislation is expected to be released later this year.
a. Voluntary compliance – industry players were urged to start preparing for changes by examining existing ASIC guidelines on risk management, conflicts of interest and any exemptions that may apply. This will determine their current compliance status and hold them in good stead to roll out products and services under new arrangements.
b. Funding for purpose – organisations should not wait until the new rules come into effect to start raising capital or recruiting talent.
c. Consumer protection – the challenge for any country is to get the balance right between innovation and consumer protection. Custody and taxonomy are two areas that will require further clarity to avoid any potential confusion in the market.
d. Systemic stability – a crucial area to consider if cryptocurrency is going to become the fundamental infrastructure for financial services and financial markets.
Rahul Advani, Senior Policy Director, APAC at Ripple, said, “Treasury has indicated that Exposure Draft legislation for regulating digital asset platforms will be released this year but the proposal paper raises a few questions which we hope will be resolved. For one, Ripple believes that entities with an AFSL licence shouldn’t need a new licence for digital asset facilities.
“Treasury has proposed thresholds so platform providers can be exempt from holding an AFSL, presumably to spur innovation. We feel this is a blunt tool and could expose these entities to cliff-edge effects and poor take-up rates.
“The paper calls for a transition period of 12 months for industry participants to comply and obtain a licence if required. Ripple advocates for an exemption regime until the AFSL licence is granted to avoid any service disruptions.”
