Crypto is just finance with new plumbing: Australia’s ASIC fintech chief

Rhys Bollen, the head of fintech at Australia’s securities regulator, the Australian Securities and Investments Commission (ASIC), has proposed that blockchain and crypto technologies should not be treated as separate asset classes in legislation. Speaking at the Melbourne Money & Finance Conference, Bollen argued that crypto should be regulated based on its economic substance rather than its technological form. This approach suggests that tokenized securities should fall under existing securities laws, and stablecoins should be governed by payment services legislation, with other crypto elements potentially subject to consumer protection laws.

Challenging Crypto-Specific Frameworks

Bollen’s perspective contrasts with the development of crypto-specific regulatory frameworks seen in other jurisdictions, such as the CLARITY Act in the US and the Markets in Crypto-Assets Regulation (MiCA) in Europe. He asserted that the core financial functions—capital allocation, payments, and risk management—have evolved with technological advancements. Distributed ledger technologies like blockchain, he stated, perform these longstanding financial activities and should not be regulated differently simply due to their underlying technology. Bollen emphasized that regulatory systems have historically adapted to technological changes, such as the shift from paper to electronic records, without abandoning fundamental principles like consumer protection and market integrity.

Australia's Integrated Regulatory Approach

Australia is moving towards this integrated regulatory model. The primary crypto legislation, the Digital Asset Framework bill, aims to amend existing parts of the Corporations Act rather than create a standalone crypto bill. This approach seeks to integrate digital asset platforms into the established regulatory architecture. ASIC’s Information Sheet 225 further supports this by stating that existing definitions of “financial product” and “financial service” under the Corporations Act can apply to digital assets. This guidance explicitly rejects the idea of digital assets as a discrete asset class, confirming they fall under regulation if they function as a security, derivative, managed investment scheme interest, or non-cash payment facility.

Bollen believes that focusing on economic characteristics over technological labels will provide clearer rules for market participants and reduce opportunities for regulatory arbitrage. ASIC Information Sheet 225 also prioritizes the regulation of intermediaries over tokens, as most consumer harm in the digital asset space has originated from the conduct of crypto platforms offering services like custody, trading, lending, and yield generation.

Addressing Decentralized Offerings

While acknowledging that decentralized products and services present classification challenges, Bollen suggested that legal analysis should focus on practical control and benefit. He stated that where identifiable parties exert influence over protocol design, governance, or economic outcomes, regulatory obligations should apply.