Australian Government Regulator Has Questions for Blockchain Adopters
The Australian Securities and Investment Commission (ASIC) has released an information broadsheet on blockchain technology today. The sheet contains six questions that the regulator is likely to ask during its assessment for companies and startups considering the use of blockchain technology.
As a government body, the ASIC is Australia’s financial services regulatory that also oversees financial markets and the country’s corporate infrastructure. Essentially, all Australian companies, financial markets and financial services such as investments, insurance, and credit fall are all regulated by the commission.
With the advent of financial technology innovation, the ASIC has today issued an information sheet to financial services companies looking to leverage blockchain technology.
Pinning blockchain as DLT, or distributed ledger technology, the ASIC acknowledges that the innovation is being used within Australia in a number of areas including foreign remittance payments, debt issuance programs, and securities settlement systems. Beyond its borders, the ASIC adds that DLT is used for the above use cases including foreign currency markets and interbank payments.
“We expect that the range of potential applications of DLT will grow exponentially over time. This could have far-reaching implications for our stakeholders, and affect the way these entities operate and the structure of the market in which they offer their services,” reads an excerpt from the information sheet explaining why the ASIC is pushing toward blockchain regulations.
Titled ‘Evaluating Distributed Ledger Technology ’, the information sheet broadly explains the scope of the ASIC’s regulatory framework.
To companies and startups considering distributed ledger technology, the ASIC lists six questions. Six questions that the ASIC ‘is likely to ask’ during its assessment of an applicant’s proposed use of blockchain technology to see if the person’s regulatory obligations are met.
They are:
- How will the DLT be used?
- What DLT platform is being used?
- How is the DLT using data?
- How is the DLT run?
- How does the DLT work under the law?
- How does the DLT affect others?
The ASIC is welcoming those interested in adopting the innovation to contact the commission through its ‘Innovation Hub’ platform, one that allows FinTech startups gain guidance to navigate Australia’s regulatory framework.
ASIC Chairman Greg Medcraft added:
This info sheet is for both existing licensees and start-ups. It will help to fast track our discussions with stakeholders and we want to use the framework as a conversation starter as the technology continues to evolve.
Meanwhile, the Australian Securities Exchange (ASX), incidentally the world’s most profitable major stock exchange, is notable for its ongoing testing process of a blockchain-based clearing and settlement system. If adopted, the ASX is likely to become the world’s first major stock exchange operator to power its post-trade infrastructure using blockchain technology.
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