Author: Aiying Aiying; Source: AiYing Compliance

Recently, a document issued by the Australian Securities and Investments Commission The consultation document issued by ASIC has quietly appeared at the center of discussion in the field of digital finance. The document titled "CP 381: Update on Financial Products and Services for Digital Assets" is not only a dialogue examining tradition and innovation, but also a meeting between regulatory authorities and technology pioneers on the evolution path of global compliance and financial technology. Open confrontation. For the Web3 world, its significance is not limited to the evolution of , but also a reminder for global digital asset practitioners on how to deal with future storms. Through a unique perspective, Aiying interprets this document in depth and explores its potential impact on RWA (real world assets), Web3 payment, asset management, stable currency and other fields, aiming to provide insights for senior industry practitioners to deal with New challenges and seizing new opportunities.

1. Digital asset supervision: confusion in the old world and new rules The birth of

Back in 2017, ASIC first published guidance on cryptoassets, which covered ICOs (Initial Coin Offerings) at the time. In this initial version of the guidance, regulators attempted to define the boundaries of this emerging field. However, over time, the world of digital assets has changed dramatically - from a single token to tens of thousands of different categories of digital assets, the evolution of blockchain technology has promoted the tokenization of real-world assets (RWA) , the asset management method was reconstructed, and the concept of stable currency gradually became an important part of global payments. ASIC's "INFO 225" is constantly updated based on this evolution, and in this 2024 update, we see that the regulator's focus has shifted from a single cryptocurrency to a more systematic digital financial ecosystem.

2. The core of the document - the determination of boundaries and the repositioning of compliance

The core of "CP 381" lies in the re-updating of the "INFO 225" guide. It aims to clarify when digital assets become “financial products” and therefore must comply with Australian financial regulations. The update provides an in-depth classification of multiple digital asset forms—from stablecoins to tokenized securities to complex financial services structures—each of which has the potential to be included in the regulatory framework for traditional financial products. This means that the future development path of digital assets will not only be driven by technology, but also how the regulatory framework adapts to the disruptive power of these technologies.

The update includes a re-evaluation of the definition of digital assets, particularly with regard to how certain complex types of digital assets meet the requirements of the Corporations Act 2001 2001). The document clearly states that the judgment criteria for financial products cover the scenario of “making financial investments, managing financial risks, or making non-cash payments through a certain facility.” In addition, the document also introduces applications for regulatory exemptions. The process, especially for those digital asset business providers that provide services related to financial products, is required to obtain an Australian Financial Services (AFS) license

In order to be closer. Practical operation, "CP 381》Includes multiple real-life cases in the update, such as:

Regulatory framework for trading tokens and stablecoins: The properties of stablecoins as financial products will be based on It is classified based on the way it is anchored to legal currency. For example, if certain stablecoins are considered "non-cash payment instruments", they need to apply for an AFS license and meet the corresponding licensing requirements.

RWA Tokenized Securities: Some tokens used for real-world assets may be considered "financial investments" if they have security-like properties, such as giving the holder some form of income rights. Tools" and thus need to comply with securities-related regulations.

Staking Services: Native token staking services, if they provide fixed income or have some kind of investment Features may also be considered a financial product.

Regulatory considerations for NFT: If a non-fungible token (NFT) only represents art or collections, it is generally not a financial product, but if it is bound to a certain financial arrangement , such as providing partial ownership or future income rights, will require compliance assessment based on specific circumstances.

ASIC uses these cases to help industry practitioners clarify compliance requirements under different business forms, and provides a reference for how to adjust business models to comply with current regulations.

Although such updates help clarify the financial attributes of digital assets, they also reveal the confusion and groping of regulatory authorities when facing new asset classes. ASIC emphasized its insistence on "principled regulation", that is, Although this approach can improve compliance consistency by trying to govern these emerging technology forms through existing financial regulations, it often requires more details and guidance when facing complex and diverse Web3 scenarios.Come and prescribe the right medicine. This is exactly the problem that the introduction of multiple cases in the document aims to solve - through specific scenario-based examples, practitioners can understand how to adjust their business to a compliance track.

3. Current status of Australia’s cryptocurrency market

Australia’s cryptocurrency market has experienced significant development in recent years, showing a trend of diversification and rapid growth. According to a June 2023 research report, approximately 31.6% of Australians hold or have held cryptocurrency, ranking among the highest penetration rates in the world. This high level of participation reflects the public’s strong interest in digital assets. At the same time, the number of cryptocurrency ATMs in Australia has surged, with more than 1,200 as of August 2024, making it one of the fastest growing globally. The widespread deployment of these ATMs facilitates users' conversion between digital currencies and cash, further promoting the popularity of cryptocurrency.

In terms of regulatory environment, Australia has always been at the forefront of cryptocurrency regulation. Back in 2017, double VAT was eliminated in cryptocurrency transactions, lowering transaction barriers. However, with the rapid development of the market, regulators such as the Australian Securities and Investments Commission (ASIC) and the Australian Transaction Reports and Analysis Center (AUSTRAC) have strengthened supervision of the field, and the future regulatory framework is expected to be finalized by mid-2025.

4. Global Perspective and Impact: Between Regulatory Unity and Differentiation

In the current wave of digital asset regulation, the balance between globalization and localization has become key factors that determine success or failure. ASIC’s approach partly reflects Australia’s response to global regulatory trends, such as the International Organization of Securities Commissions (IOSCO) recommendations on crypto asset markets mentioned in the document. In other regions, the European Union's "Crypto Asset Market Supervision Act" (MiCA) and regulations in Singapore, Hong Kong and other places also show the same regulatory logic: on the basis of following "same activities, same risks, same supervision" as much as possible on, fine-tuning for the uniqueness of different asset classes. The existence of such convergence and differences in regulatory frameworks provides an environment of both opportunities and challenges for global players in the Web3 field.

ASIC also mentioned that Australia is advancing a new regulatory framework for payment service providers, which will not replace existing financial services regulations. , but as a supplement. This means that digital asset platforms and digital asset facilities (DAPs and DAFs) need to comply with both new payment regulations and traditional financial services regulations. This "dual-track regulatory" model is similar to the practices in Europe, Hong Kong and other places, ensuring that emerging financial technology products enjoy freedom of innovation while maintaining safety and transparency.are strictly regulated.

The Australian market is also an area that Aiying focuses on, and many customers choose to take root here. It can be seen from ASIC’s consultation document that the regulatory path for Web3 is gradually becoming clearer. Regulators no longer just respond passively, but actively participate in trying to guide the development of technology through new regulations. This means new opportunities for industry practitioners and us. Let us look forward to the release of the final details.