Aussie FPA supports the “Crypto Rulebook” and regulation of exchanges

The Financial Planning Association of Australia (FPA) has shown its support for the “Crypto Rule Book” idea, calling for regulation of exchanges rather than crypto assets.

In May, the Australian Law Reform Council (ALRC) proposed tackling crypto regulation through a rulebook-like framework that lays out a set of incrementally updated compliance principles that local crypto firms must adhere to.

The comments came via a submission to the Treasury Department by FPA Head of Policy, Strategy and Innovation Ben Marshan, who also argued that the regulation of crypto exchanges should fall under the current financial services regime rather than a new separate regulatory framework.

“First, it would create an alternative, dual regulatory regime to regulate what is, at its core, the buying and holding of a financial asset for retail or wholesale investors.”

“Second, existing financial services licensees would have to apply for and hold a separate type of license, increasing costs and duplication of regulations,” he added.

Mashan also stressed the need to introduce greater consumer protections for local Australian crypto users, stressing that regulating secondary providers (crypto exchanges, brokers, etc.) is the best way to do this.

“The regulation of a financial product or service should not depend on the technology underlying the asset,” he said, adding that “it would be virtually impossible to regulate the product because it’s so decentralized that it could be used in all sorts of ways.” foreign jurisdictions.”

Focusing regulation on crypto service providers will remove a lot of “complexity” from the equation given the rapidly evolving nature of blockchain technology and crypto, Mashan argued, adding that the idea of ​​the ALRC’s crypto rulebook for businesses “makes sense ” be.

“It makes it a lot easier because instead of having to wade through thousands of pages of the Corporations Act, people can go to a specific section and it’s a lot more efficient.”

Speaking to Cointelegraph, Ryan Parsons, co-CEO of local crypto exchange Swyftx, echoed Mashan’s calls, noting that his firm would soon like to see “reasonable measures to support consumer protection” so Australia doesn’t risk falling behind United States and European Union:

“We favor crypto platforms that operate within the existing financial services licensing framework, albeit in a way that respects the unique characteristics of digital assets.”

“We believe this is the best way to reduce complexity and costs and build confidence in crypto as an asset class among Australian investors,” he added.

Related: Chainalysis Tips Australia will crack down on misleading crypto ads

Another key idea highlighted in the ALRC report was the introduction of the Twin Peaks regulatory model, in which regulation is split between one entity tasked with overseeing the maintenance of financial system stability, while the other looks after it institutional market behavior and consumer protection.

The same model is used in Australia’s financial regulatory system, with the Australian Securities and Investments Commission (ASIC) responsible for good market conduct and consumer protection, while the Australian Prudential Regulation Authority (APRA) is responsible for financial system stability.

Since the Liberal Party was forcefully sacked from government in May, the regulatory landscape of crypto in Australia has become uncertain as Labor appears to have other fish to fish for.

As it stands, Labor has yet to take any concrete initiatives, but has outlined that introducing greater consumer protections to crypto will be a key focus.