Australia: Closed consultation Digital Asset Platforms Regulatory Framework

On 1 December 2023, the Australian Treasury closed its consultation on the draft proposal for a regulatory framework for digital asset service providers. The framework aims to protect consumers and their assets while supporting innovation in the use of digital assets and maintaining regulatory boundaries between financial products and other products. It applies to digital asset platforms dealing with token marketplaces and asset-backed tokens. Notably, the framework will require digital asset service providers to apply for an Australian Financial Services Licence (ASFL) unless the total value of platform entitlements held by any one client of the platform provider does not exceed AUD 1,500 at any one time and the total amount of assets held by the platform provider does not exceed AUD 5 million at any time. In addition, the framework outlines general obligations for platform providers concerning financial records and reporting requirements. It also regulates, minimum standards for holding assets, intermediating platform entitlements, transactional functions, token trading, asset tokenization, and funding tokenization.