Australian Regulator Sets out Crypto Policy Roadmap

The Australian Prudential Regulation Authority (APRA) has published its crypto policy roadmap and initial risk management through 2025.

“The APRA is developing the longer-term prudential framework for crypto-assets and related activities in Australia in consultation with other regulators internationally, to ensure consistency in approach,” said the authority’s chairman, Wayne Byres.

The APRA is an independent statutory authority that supervises sectors responsible for financial system stability in Australia. Under the new plan, all regulated entities are expected to conduct a comprehensive risk assessment before undertaking activities in the crypto domain.

Australia sets minimum standards for regulated entities

Furthermore, they will be expected to ensure that disclosure and compliance requirements laid down by the Australian Securities and Investments Commission (ASIC) are met.

Byres also said that the Basel Committee on Banking Supervision is currently consulting on how crypto assets will be treated by authorized deposit-taking institutions (ADIs). “This will provide the basis for internationally agreed minimum standards for ADIs, and a starting point for prudential expectations for other APRA-regulated industries,” he said.

Last month, ANZ became the first bank to mint the Australian dollar stablecoin A$DC. Meanwhile, Commonwealth Bank of Australia, which is looking to extend new crypto offerings to retail investors, is reportedly in discussions with regulators.

These guidelines will look beyond crypto investment, to include issuance, lending, and other activities associated with digital assets.

ETFs incoming

The regulatory guidance also comes at a time when Australia is looking to approve its first bitcoin exchange-traded funds (ETFs). The issuers include Cosmos Asset Management, which is looking to issue its Cosmos Purpose Bitcoin Access ETF, and 21Shares is aiming to launch its bitcoin and Ethereum funds on April 27.

Australia has been tightening its regulatory framework since late last year. ASIC commissioner Cathie Armour stated in a recent crypto summit, “We’re interested in any sort of new innovation where we think there are real benefits of innovation being within our regulatory regime. There are a bunch of rules there that you need to follow.”

Australia recently proposed regulations to cover cryptocurrency taxes, investor protection from criminals, and ways to regulate digital banks, cryptocurrency exchanges, and brokers.