Australia’s securities regulator argues cryptocurrency should be regulated based on its economic function, not as a new asset class. Rhys Bollen of the Australian Securities and Investments Commission stated crypto performs the same core financial activities as traditional systems. The country’s approach integrates digital assets into existing laws, focusing on intermediaries and consumer protection, rather than creating standalone crypto legislation.
Australia’s securities regulator has proposed a regulatory approach for digital assets based on economic substance rather than technological form. Rhys Bollen, the head of fintech at the Australian Securities and Investments Commission (ASIC), outlined this view in a paper presented at the Melbourne Money & Finance Conference.
Bollen argued that digital assets largely represent new technological instances of longstanding financial activities. “While the mechanisms of issuance, transfer and record-keeping have changed, the underlying economic functions served by these instruments have not,” he said.
This contrasts with crypto-specific frameworks like the CLARITY Act in the US and the Markets in Crypto-Assets Regulation in Europe. Australia is integrating digital assets into its existing financial services framework through amendments in the Digital Asset Framework bill.
“The Bill does not abandon the existing financial services framework. Instead, it introduces tailored amendments that integrate digital asset platforms into the established regulatory architecture,” Bollen stated. Guidance from ASIC Information Sheet 225 confirms digital assets can fall under existing definitions of financial products.
The regulator’s guidance explicitly rejects the notion that digital assets constitute a discrete asset class for regulatory purposes. Bollen noted that a focus on economic characteristics rather than technological labels provides clearer rules.
Most consumer harm has stemmed from the conduct of crypto platforms offering services like custody and trading. The regulatory focus is therefore on intermediaries rather than the tokens themselves.
Bollen acknowledged classification issues may arise with decentralized products. He stated legal analysis should focus on practical control and benefit rather than formal claims of decentralization.
“Where identifiable parties exercise influence over protocol design, governance, or economic outcomes, regulatory obligations can and should attach,” Bollen added. This principle guides how regulators may approach decentralized finance offerings.
