The Australian Prudential Regulation Authority (APRA) has laid out a policy roadmap for the implementation of regulation for financial entities engaging in activity with crypto-assets.
Australia's financial regulator set a tentative goal of 2025 for its framework to be effective, in a letter by Chair Wayne Byres on Thursday.
To this end, APRA plans to conduct consultations on requirements for the financial treatment of crypto-assets, expected to be undertaken in 2023.
Regulation of stablecoins is also being considered by incorporating them into the existing framework for "store-value facilities," a broad term for any non-cash facilities in which customers pre-pay money for future redemption. APRA also envisages consulting on this in 2023.
In addition, APRA intends to advance requirements for operational risk management when engaging in crypto activities in areas such as control effectiveness, business continuity and service provider management. A draft standard will be released in the next few months.
The regulator detailed its expectations for how entities manage risk around crypto-assets, asking them to "apply robust risk management controls with clear accountabilities and relevant reporting." Entities should have conducted a comprehensive risk assessment before engaging in crypto-asset activities and have plans in place to mitigate against risks associated with dealing in crypto.
APRA's statement comes as the market for crypto investment vehicles gathers pace in Australia. Earlier this week, exchange-traded fund (ETF) issuer 21Shares announced it will launch two spot ETFs next week, one investing directly in bitcoin (BTC) and the other in ether (ETH). They are the country's first spot exchange-traded products.
A study last year by comparison site Finder found Australians to be among the most enthusiastic adopters of crypto, with nearly 18% owning some. This compared to a global average of 11.4%.
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