Australian Regulators Want To Regulate Cryptocurrencies By 2025

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Australian regulators seek crypto regulation by 2025

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