The Australian Prudential Regulation Authority (APRA) has released a policy roadmap for financial institutions to adopt assets for crypto regulations.
According to a policy statement issued a few days ago, Australia’s primary financial regulator has set a preliminary goal for the framework to be operational by 2025.
To that end, APRA plans to hold discussions on the standards for the financial treatment of crypto-assets in 2023.
Stablecoins are also being considered for inclusion in the existing framework for “stored-value facilities” — a broad term for any non-cash facility in which users pre-pay money for future redemption.
“While activities associated with assets for crypto regulations are still relatively limited in Australia, such activities’ potential scale and risks could become significant over time,” according to the ‘Crypto-assets: Risk management expectations and policy roadmap.”
According to the roadmap, the new legislation will apply to “investment in crypto-assets, lending linked to crypto-assets, issuance of crypto-assets, and providing services associated with crypto-assets for customers.”
According to the study, the risks of working with cryptocurrencies include operational risk, investment risk, and credit risk for financial institutions.
The regulator outlined its expectations for how companies manage risk associated with crypto-assets, instructing them, among other things, to implement comprehensive risk management procedures with clear accountabilities and relevant reporting.
Entities should conduct a full risk assessment before engaging in crypto-asset activities and have measures in place to manage the risks associated with doing so.
The letter also indicates that companies dealing with stablecoins — cryptocurrencies whose value is tied to specific assets — will face increased scrutiny.
The announcement by APRA comes as cryptocurrency investment in Australia gains traction. 21Shares, an exchange-traded fund (ETF) issuer, announced a few days ago that two spot ETFs, one investing directly in Bitcoin and the other in Ether, will be launched in the coming days.
According to a study conducted last year by comparison site Finder, Australians are among the most ardent crypto enthusiasts, with 18.3 percent owning some. This is a significant figure when compared to the global average of 14.6%.
