Australias main financial regulator has set an aim of 2025 for the crypto regulation framework to be effective.
The Australian Prudential Regulation Authority (APRA) has released a policy roadmap to adopt crypto-asset regulation for financial institutions.
According to a policy statement released a few days ago, Australia’s primary financial regulator has set a provisional aim for 2025 for the framework to be practical.
To that purpose, APRA intends to hold discussions in 2023 on the standards for the financial treatment of crypto-assets.
The inclusion of stablecoins within the existing framework for “store-value facilities” — a broad phrase for any non-cash facility in which users pre-pay money for future redemption — is also being examined.
According to the ‘Crypto-assets: Risk management expectations and policy roadmap‘, “While activities associated with crypto-assets are still relatively limited in Australia, such activities’ potential scale and risks could become significant over time.”
The roadmap anticipates that “investment in crypto-assets, lending linked with crypto-assets, issuance of crypto-assets, and providing services associated with crypto-assets for customers” will all be subject to the new legislation.
The study adds that the dangers of working with cryptocurrencies could include operational risk, investment risk, and credit risk for financial institutions.
The regulator outlined its expectations on how companies manage risk related to crypto-assets, instructing them to implement comprehensive risk management procedures with clear accountabilities and relevant reporting, among other things.
Before engaging in crypto-asset activities, entities should perform a full risk assessment and have measures in place to manage the risks associated with doing so.
The letter also indicates that businesses dealing with stablecoins — cryptocurrencies whose value is tied to specific assets — will be subjected to more scrutiny.
The announcement by APRA comes as a crypto investment in Australia picks up speed. 21Shares, an exchange-traded fund (ETF) issuer, revealed a few days ago that two spot ETFs will be launched over the next few days, one investing directly in Bitcoin and the other in Ether.
According to a study conducted by comparison site Finder last year, Australians are among the most ardent crypto enthusiasts, with 18.3 per cent owning some. Compared to a global average of 14.6 per cent, this is a significant number.
Source : Ndtv.com