The proposed framework would require digital asset platforms that hold over a certain threshold of Australians assets ($1,500 for an individual; $5 million in aggregate) to obtain an Australian Financial Services Licence.

Digital asset platforms would need to meet all general licence obligations, consistent with other licence holders.

According to the factsheet published together with the proposal paper, the general obligations are drawn from the Australian financial services law and include:

• providing the financial service efficiently, honestly, and fairly
• managing conflicts of interest
• having a dispute resolution system
• meeting solvency and cash reserve requirements
• keeping and submitting financial records
• producing product disclosure statements
• monitoring for and disrupting market misconduct.

All digital asset platforms will also need to meet specific obligations that take into account the nature of the platforms, of tokens, and their risks. The specific obligations, unique to the digital assets industry, will include:

• standard form platform contracts
• minimum standards for holding tokens
• standards for custody software
• standards when transacting in tokens.

The proposal would also apply additional obligations to four specific activities involving non-financial products offered by digital asset platforms:

• Trading – the exchange of digital asset platform entitlements between account holders.
• Staking – the participation in validating transactions on a public network.
• Tokenisation – the creation and exchange of entitlements backed by tangible and intangible assets.
• Fundraising – the sale of entitlements to fund the development of products and services.

Obligations are "targeted to address some of the risks that arise from digital asset platform business models and the nature of the tokens they provide access to." 

Deadline for comments is 1 December 2023.

The Committee welcomed the opportunity to "consider stakeholders’ views on the regulation of digital assets in Australia" but found that the Bill was "at odds with the measured and industry accepted approach" that the Australian Government was currently pursuing.

He discussed where the case for a central bank digital currency (CBDC) in Australia fits into the wider international debate over the future of money. Jones set out some foundational features of the two-tier monetary system that comprises public and private money and payment services, looked at the arguments advanced for and against CBDCs internationally, and how they translate to an Australian context. He also provided an update on the CBDC pilot project the Reserve Bank is engaged in.

The roadmap identifies current and future opportunities for blockchain and provides signposts for the future development and opportunities for the technology. It focuses on: regulation and standards; skills, capability and innovation; international investment and collaboration; and sectorial opportunities. 

The roadmap concluded:

"While blockchain initially gained prominence in the public sphere through bitcoin and other cryptocurrencies, its potential for the broader economy is beginning to be appreciated by other sectors. As outlined in this roadmap, there are significant opportunities for the technology across multiple sectors in the economy: to save money, solve problems, increase efficiencies in multiple processes, and enable new opportunities. There are some challenges to realising these opportunities which need to be addressed in order to capitalise on this promising technology. However, it is clear that, in the spheres of regulation and standards, skills, capability and innovation, and international investment and collaboration, there is significant and positive progress towards resolving those issues and forging ahead with blockchain initiatives in Australia.

 "Continued progress will rely on government, industry and the research sector sharing a vision and a focus for the development of blockchain for the whole economy, which this Roadmap’s signposts provide. All three sectors must ultimately continue to work together in the collaborative spirit that helped produce this Roadmap, to ensure that Australia can seize the opportunities of a blockchainempowered future."

The release said that the roadmap will focus on a number of policy areas including regulation, skills and capacity building, innovation, investment, and international competitiveness and collaboration. 

The Minister said that Australia needs to seize the opportunities presented by blockchain. 

“The national strategy puts us on the front foot in exploring how government and industry can enhance the long-term development of blockchain and its uses", she said.

“We will work closely with blockchain and technology experts from industry and academia to develop the strategy, as well as with CSIRO’s Data61 to incorporate findings from their forthcoming future scenarios report on blockchain."

In a media release, ASIC said that Byte Power Group Ltd, which is listed on the Australian Securities Exchange (ASX), had paid the penalty after the regulator issued an infringement notice.  

According to ASIC, the diversified technology, food and wine distribution company made an announcement on the ASX in October 2017 titled “BPG Cryptocurrency Exchange Update” which stated that its Singapore-based partner for the development of a cryptocurrency exchange, Soar Labs Pte Ltd, “is well advanced in the software development and expects to be Alpha testing the system robustness before the end of the year”.  

ASIC alleged that by 14 December 2017, Byte Power knew that it had approached alternative cryptocurrency exchange software providers and that Soar Labs had not carried out any work on the development of Byte Power’s cryptocurrency exchange. 

No testing of any software had started or was ready to be started, according to ASIC. 

"ASIC alleges that by failing to inform the ASX that the software development for its proposed cryptocurrency exchange was not advanced and testing of the system software was not going to be undertaken by the end of the year, Byte Power was in breach of its continuous disclosure obligations," the release said. 

Byte Power complied with ASIC's infringement notice and paid the penalty imposed earlier this month. 

ASIC also placed some restrictions on Byte Power’s ability to raise capital without full disclosure using a full-form prospectus, which will be in place until 12 December 2019.

It said that although the sector still represents a small portion of global assets, its fast growth is resulting in increased regulatory monitoring. For the period between 2018 and 2019, the regulator will concentrate on "monitoring threats of harm from emerging products", such a ICOs and cryptocurrencies.

During that time, ASIC will develop a new framework "for applying the principles for regulating market infrastructure providers to crypto exchanges".

It will monitor emerging products, such as ICOs, and will intervene "where there is poor behaviour and potential harm to consumers and investors".

The regulator also said that it had formed internal cross-team working groups to better co-ordinate its work on new supervisory approaches, and in relation to poor practices in a variety of sectors, including cryptocurrencies.