Aussie FPA Supports ‘Crypto Rule Book’, Suggests Regulating Crypto Like Other Financial Products
The Financial Planning Association of Australia (FPA) has shown its support for the idea of a “cryptocurrency rule book” and has called for the regulation of exchanges instead of crypto assets.
In May, the Australian Law Reform Council (ALRC) proposed to tackle crypto regulation through a rule book-style framework which sets out a series of gradually updated compliance principles for local crypto firms to adhere to.
The comments came via a submission to the Treasury by FPA’s 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.
“Firstly, it would create an alternate, duplicate regulatory regime to regulate what at the core is the purchase and holding of a financial asset to either retail or wholesale investors. Secondly, it would require existing financial service licensees to apply for and hold a separate type of license, adding to cost and regulatory duplication,”
Mashan also emphasized a need to roll out greater consumer protections for local Australian crypto users and highlighted that regulating secondary providers (crypto exchanges, brokers, etc.) is the best way to do this.
“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.”
Given the rapidly evolving nature of blockchain technology and crypto, Mashan argues that focusing regulation on crypto service providers will remove a great deal of “complexity” from the equation, adding that the ALRC’s crypto rule book idea for firms to follow “makes sense.”
ALRC’s report also suggested introducing the Twin Peaks regulatory model, in which one entity oversees financial system stability and the other institutional market conduct and consumer protection.
The same model is used in Australia’s financial regulatory system, with ASIC responsible for market conduct and consumer protection and APRA for financial system stability. Since the Liberal party was ousted from the government in May, Australia’s crypto regulatory landscape is uncertain as the Labor party has other priorities.
Labor has yet to provide any concrete initiatives but has said introducing greater consumer protections in crypto will be a focus.
Source: CoinTelegraph. All rights reserved.
