Australian FPA supports 'crypto rulebook' and regulation of exchanges
Categories: Crypto News US
Australian FPA supports 'crypto rulebook' and regulation of exchanges
The Financial Planning Association of Australia (FPA) has shown its support for the idea of a crypto rulebook and called for regulating exchanges rather than crypto assets. In May, the Australian Law Reform Council (ALRC) proposed tackling crypto regulation through a rulebook-style framework, which sets out a series of gradually updated compliance principles for local crypto firms to follow.
The comments came via a submission to the Treasury by FPAs head of policy, strategy and innovation, Ben Marshan, who also argued that the regulation of crypto exchanges should fall under the current financial services regime and not under a new separate legal framework. “The regulation of a financial product or service should not depend on the technology which underlies the asset,” he said, adding that “it would be virtually impossible to regulate the product because it’s so decentralized, they’re in all sorts of foreign jurisdictions.”
Focusing on crypto service providers would take a lot of "complexity" out of the equation given the rapidly evolving nature of blockchain technology and crypto, Mashan argued that ALRC's crypto rulebook idea for firms "makes sense".
Another important idea highlighted in the ALRC's report was the introduction of the Twin Peaks regulatory model, in which regulation is split between an entity tasked with overseeing the maintenance of financial system stability while another with institutional market conduct and consumer protection takes care of.
The same model is used in Australia's financial regulatory system, with the Australian Securities and Investments Commission (ASIC) in charge of good market conduct and consumer protection, while the Australian Prudential Regulation Authority (APRA) is responsible for the stability of the financial system.
Since the Liberal Party was forcefully thrown out of government in May, the regulatory landscape of crypto in Australia has become uncertain as the Labor Party appears to have other fish to fry. As it stands, Labor has yet to take any concrete initiatives, but has underlined that introducing greater consumer protections into crypto will be a key area of focus.