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- Regulator from Australia have published a consultation paper consisting vital issues related to crypto
- Bitcoin and Ethereum are only digital currencies that could meet their relevant assessment criteria
- Australian regulator is working proactively in reaching out to domestic blockchain and crypto-related firms
- ASIC seeks to get public inputs on digital assets ETPs, which the residents can submit by July 27, 2021
Regulators are eyeing the cryptocurrency ecosystem. Several regulators are scrutinizing the ecosystem which also has affected the prices in the market. In mid-May Chinese regulatory concerns were a prominent reason that caused a sharpest dip in the price. Other countries like India, China, and Turkey have also brought harsh regulations. In recent developments, Australia Securities and Investments Commission (ASIC) is also taking its stance regarding cryptocurrency ETPs.
Australian regulator noted critical crypto-related issues
ASIC released a consultation paper on Wednesday. The released paper consisted of two vital issues regarding crypto products. First, Australian regulators are concerned whether the unique and ever evolving features of crypto asset ETPs could meet their compliance. Moreover, whether these currencies can be reliably priced. And how digital currencies should be classified with respect to underlying asset rules.
Second, the regulators are also concerned regarding the crypto ETP issuers. ASIC concerns how the providers can ensure that such ETPs are compliant with their regulatory obligations in a consistent fashion. These concerns are in respect to crypto custody, risk management, and disclosure.
Observing such complexity and fast pace in terms of evolution in the cryptosphere the regulator deemed that it seems necessary to consult widely in terms of assessing the vital issues at stake.
Bitcoin and Ethereum can serve as an underlying asset
The recently released paper revealed that the regulator deemed that every crypto asset cannot serve as an appropriate underlying asset for an ETP. The regulator considered the factor after measuring the maturity of the industry’s spot and the level of regulation of its future market.
In the current scenario, the regulator believes that Bitcoin and Ethereum are only digital currencies that could meet their relevant assessment criteria. Hence, ASIC claimed that it is open to approve a crypto asset ETP that could meet all relevant compliance.
ASIC plans to build trust with crypto economy
ASIC also claimed that it is aware of rising demand in their launch on regulated markets in the nation. In recent months the regulatory enforcement has been observed working proactively in reaching out to domestic blockchain and crypto-related firms. The enforcement is working on increasing collaborations with the ecosystem.
However, ASIC has received criticism from few firms due to the perceived opacity of existing compliance and firm’s regulations. The law enforcement also noted that the current classification methods are concerning Australian government.
Following the scenario, the government selected organization will study options about the development of a comprehensive regulatory framework for virtual assets.
People feedback about the licensed Australian market
ASIC is looking to get public inputs on digital assets ETPs. The regulator wants suggestions whether it would be appropriate to offer retail investors exposure to the cryptocurrency underlying ETPs. The regulator has asked the participants to submit their responses by July 27, 2021. Notably, the respondents can choose to submit their views openly, anonymously, or by using any alias.
Alex Vynokur, the CEO and founder of BetaShares has agreed with the regulator’s proposal. Alex believes that crypto ETPs should be limited to a small subset of digital currencies that can demonstrate robust liquidity, transparency, and price discovery.
