Holders of underlying crypto-asset investment products will require a license, according to Australia’s corporate watchdog, as part of a new set of guidelines aimed at improving transparency and protecting investors.
Despite its massive expansion in the past year, many of Australia’s leading financial institutions have remained uninterested in the high-risk cryptocurrency industry.
To compete with other nations in the fast-growing area, a Senate study recommended that Australia enact new regulations such as tax breaks and a licensing scheme for digital asset miners.
Holders of underlying assets that make up crypto-assets will need to fill out a new “crypto-asset” part in their license applications, according to Australia’s Securities and Investments Commission (ASIC).
“Product issuers and market operators must evaluate crypto-assets’ distinctive characteristics and risks in completing their current regulatory duties,” stated ASIC Commissioner Cathie Armour.
The scale of the digital asset sector in Australia is estimated to be in the billions of dollars. According to finder.com.au, a sixth of Australians will possess cryptocurrencies worth AUD 8 billion (45,200 crores) in 2021, with bitcoin being the most popular.
The ASIC also offered advice on best practices for crypto-asset monitoring, holding, and pricing, as well as risk management and transparency.