metallic Bitcoins in front of badge with the flag of Australia

Australia’s statutory authority lays out policy framework for digital asset-related entities

APRA Chairman Wayne Byres recently wrote to all APRA-regulated entities outlining the body’s immediate plans for managing risks and future policy plans for the digital assets industry. 

Australia is moving rapidly to provide all-encompassing regulations for the digital assets industry. The Australian Prudential Regulations Authority (APRA), the statutory authority of the Australian government and regulator of the country’s financial services industry, has been the latest agency to release its digital currency regulations roadmap.

APRA plans to fully implement its regulations in a few years 

In a letter submitted to all APRA-regulated entities, the regulatory body outlined the steps it would be taking to curtail new risks posed by the rapid growth of the digital assets industry. The letter, titled “Crypto-assets: Risk management expectations and policy roadmap,” set out APRA’s initial risk management expectations and a policy roadmap for the industry.

The immediate risk management expectations that the regulatory body has for entities engaging in activities related to digital assets were highlighted in the roadmap. For one, entities are expected to conduct due diligence and comprehensive risk assessment. This is to ensure they have a good understanding of digital assets before venturing into providing services for the sector.

The entities are also expected to “apply robust risk management controls” and keep to other Prudential standards for financial services providers.

On the policy side, APRA disclosed its roadmap for developing a “longer-term prudential framework for crypto-assets.” This framework will also touch on digital assets related to Australia in collaboration with other local and international regulators.

The timeline for the completion of the policy roadmap spans until 2025. The policy will focus on three key aspects of digital currencies that concern APRA-regulated entities, including digital currency activities, operational risks, and stablecoins.

“APRA will continue to closely monitor industry trends and emerging risks associated with crypto-assets, engage with other regulators domestically and internationally, and provide further guidance as required,” APRA Chairman Wayne Byres said.

Australia still too slow with digital assets regulations for some observers

APRA’s move is coming after AUSTRAC, another Australian market regulator, released two guidelines for the digital assets industry. The direction that the Australian authorities are taking is also in response to increased calls for digital assets regulations that have been noted by the country’s senate.

However, some Australian virtual currency market leaders have not been satisfied with the government’s pace in providing the regulations. Speaking with the Australian Financial Review recently, Greg Medcraft, former chairman of the Australian Securities and Investments Commission (ASIC), and Mark Carnegie, a venture capitalist, described the government’s efforts as not being rapid enough.

Medcraft stated that Australia risked falling behind countries like the U.K. and the U.S. in blockchain adoption. For Carnegie, the country was already driving away investors like himself with its less than welcoming regulatory conditions.

Watch: CoinGeek New York panel, Government & Public Sector Applications on Blockchain

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