A discussion cum consultation process has been launched by the Securities & Investments Commission of Australia (SIC). Consultation has been sought as to how best practices can be adopted for proper regulation and managing digitalized assets. Particularly, the consultation paper seeks advice as to which particular digital assets can be defined as “assets” and which other digitalized assets can be treated as “securities”. This could open up doors for the launch of fresh digital products in the Australian digital assets industry.
SIC is the exclusive body that looks at the issues of securities and financials within the Australian jurisdiction. Since there is currently no relevant body established for looking after the affairs of crypto in Australia, therefore, SIC also looks at crypto. However, since crypto is a newly emerging asset class, the regulator is finding difficulty in determining digital assets’ supervisory status. The authority is confused about whether to treat them as a class of “assets” or as “securities”.
In order to clarify this confusion, a public discussion cum consultation process has been initiated by SIC. For the purposes of consultation, the proposal has been duly drawn on a paper and the paper had been made public. In this paper, SIC is evidently looking for proposals and advice on particular subjects relating to crypto.
According to SIC, digital assets are part of a special class of assets that are capable of impacting the economy. Keeping in view their impacts upon the economy and several other factors, SIC is of the view that they require strict supervision and regulation. It has been pointed out in the consultation paper that the authority is well-aware of the growing interest in digital assets domestically. However, the authority is also aware that dealing with digital assets poses potential risks to users as well as markets. For this purpose, it is necessary that such products are regulated and supervised in an efficient and sound manner.
The consultation paper also talks about various types of digital assets. Thereafter, the authority has suggested that not every digital asset can be classified as an “asset”. There are some digital assets that fulfill the criteria of being treated as “assets”. However, there are also some digital products that cannot in any way be regarded as “assets”. In fact, they fulfill the criteria of being defined as “securities”. However, this is a confusing subject that definitely needs clear determination and consideration, said SIC.
It seems that Australia is moving in the same direction which was earlier followed by Brazil and Canada. The initiative also shows the intent of the Australian Government and its willingness to consider digital assets in the public interest. In the view of some experts, the Australian version of crypto regulation is a totally different proposition altogether from the rest of the world. For instance, the world’s economic giant, China, is claiming that it is supporting the crypto cause. However, except for the Chinese Digital Yuan, China is hurting badly the crypto economy.
However, so far the Australian Government’s approach towards crypto regulation is more or less neutral.