Perfect regulatory certainty in digital economy not 'realistic': ASIC

The market regulator said it remains complex to determine and provide regulatory certainty around the digital economy despite the continued growth and development across the sector.

Presenting a keynote address at the Digital Economy Conference in Sydney this morning, ASIC senior executive leader, fintech Rhys Bollen explained that regulatory certainty for tokenisation and digital assets is not at a binary state, but a "sufficient" degree of guidance already exists for related entities to adhere to.

That includes the passage of the Digital Asset Framework Bill earlier this year, which requires digital asset platforms (DAPs) and tokenised custody platforms (TCPs) to acquire an Australian financial services licence (AFSL) and oblige with consumer protection requirements.

Bollen said 23 firms that contain crypto-related activities have since obtained their licence to operate, with more expected to apply before the effective date of the bill in April 2027.

"If you're looking for regulatory certainty, it's not a binary state. It's not a yes/no; it's on a spectrum," he said.

"We would suggest that we have regulatory certainty today, or at least sufficient.

"We don't have perfect regulatory certainty; we don't in other sectors either as that's not a realistic state of affairs."

Further, Bollen said ASIC is providing an extension of an additional three-month period for certain businesses, following the Digital Economy Council of Australia's (DECA) submission suggested to widen its no-action period.

"It was raised with us that others may wish to bring themselves into the regime by becoming a corporate authorised representative.... we're going to reissue the no-action letter, including a couple of other scenarios and methods by which a firm can bring themselves into compliance," Bollen explained.

Additionally, to further enhance and support ASIC's roadmap to regulating the digital economy, Bollen is calling for the industry to participate the Enhanced Regulatory Sandbox program, which allows fintechs to test innovative financial products and services like AI-driven advice and payment tools.

ASIC is already working with eight firms on pilot programs, but Bollen is encouraging more businesses to engage with the regulator for better innovation across the financial markets.

"We're exploring further initiatives to allow financial market innovation across areas of infrastructure and tokenisation, and we'll continue to work with the bank and with DFCRC," he added.