Today the Australian Treasury published a consultation on regulating digital assets which is open until December 1. Its approach is to target intermediaries, particularly those holding assets in custody, rather than the digital assets themselves. The paper highlights the significant consumer risk where intermediaries custody or control assets, with FTX as an example. Hence intermediaries that control assets are a key target.
Digital assets are divided into financial digital assets – securities, bonds and the like and non financial digital assets. For financial digital assets, it adopts the “same risk, same rules” approach and all the usual intermediaries are expected to have an Australian Financial Services License (AFSL).
The interesting approach is for non financial digital assets. It refers to this as the ‘financialisation’ of non financial entitlements. That might include game tokens, or the tokenization of real estate, wine or tickets. In Australia, the fact of tokenizing the asset does not turn the asset into a financial asset. So games still have to comply with gaming laws, wines with their rules and so on.
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