Bitaigen Research In this article we summarize the core viewpoints of ASIC’s FinTech head on the regulation of decentralized products, clarify a substance‑over‑form regulatory approach, and examine Australia’s legislative landscape concerning tokenized securities, stablecoins, and related areas. By comparing with frameworks in the United States, the European Union, and others, readers can grasp emerging regulatory trends. This is worth a thorough read.
Regulatory Challenges for Decentralized Products
When discussing decentralized protocols and services, Leon Boron acknowledges that classifying such projects can be contentious. He stresses that regulators should focus on actual control and profit‑sharing arrangements rather than relying solely on the “decentralized” label.
“Whenever a party can be identified as influencing the design, governance, or economic outcomes of a protocol, a regulatory obligation should arise.”
This view indicates that supervisory bodies are more inclined to determine the scope of oversight based on the substantive behavior of market participants instead of formal declarations.
Regulatory Approach: Economic Substance at the Core
At the Melbourne Money and Finance Conference, ASIC’s FinTech chief Leon Boron delivered a paper titled “Regulatory Framework for Digital Assets.” He argued that digital assets should be examined “based on economic substance rather than technological form.”
He noted that tokenized securities should continue to fall under existing securities laws, while stablecoins ought to be regulated within the payment‑services legislative regime. Moreover, crypto‑related activities that touch on consumer rights may need to comply with the relevant consumer‑protection statutes.
Boron’s substance‑oriented approach stands in contrast to frameworks such as the United States’ CLARITY Act and the European Union’s Markets in Crypto‑Assets (MiCA) regulation.
“Digital assets are essentially a technological upgrade to long‑standing financial activities. Although the methods of issuance, transfer, and bookkeeping have changed, the core economic functions they serve remain the same.”
He added that regulatory systems have historically adapted to technological progress—from paper certificates to electronic ledgers—while consistently upholding the fundamental principles of consumer protection, market integrity, and systemic stability.
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Australia’s Current Legislative Landscape
Unlike many jurisdictions, Australia has not introduced a sweeping, dedicated cryptocurrency statute. Boron explained that the existing Digital Asset Framework Act merely amends the Corporations Act in a limited way, aiming to bring digital‑asset platforms within the pre‑existing financial‑services regulatory regime rather than creating an entirely new structure.
“The Act does not discard the existing financial‑services framework; instead, it incorporates digital‑asset platforms through targeted amendments to the current regime.”
ASIC has issued Information Brief 225 to guide the market, clarifying that the definitions of “financial product” and “financial service” in the Corporations Act also apply to digital assets.
“ASIC’s guidance rejects the notion of treating digital assets as a separate asset class. Instead, when a digital asset functions as a security, derivative, investment‑plan interest, or non‑cash payment tool, it falls within the regulatory perimeter.”
Boron believes that focusing on economic characteristics rather than technical labels helps regulators craft clearer rules and effectively reduces opportunities for regulatory arbitrage. Information Brief 225 also emphasizes the oversight of intermediaries rather than imposing direct constraints on the tokens themselves, because most consumer‑harm cases stem from the conduct of custodial, exchange, lending, or yield‑service platforms.
*Note: Gains from cryptocurrency transactions may be taxable in the user’s jurisdiction; individuals should consult local tax regulations.*
Technical Logic Behind Regulation
Boron pointed out that the shift of financial infrastructure from paper records to electronic records did not require a fundamental overhaul of the regulatory framework; similarly, blockchain technology should not be treated as an exception that mandates an entirely new regime.
“When financial infrastructure moves from paper to electronic records, a brand‑new regulatory framework is not needed; the same logic applies to blockchain.”
He further emphasized that blockchain and cryptocurrencies functionally resemble existing financial infrastructure, and legislation should not treat them as isolated asset categories.
“Regulatory systems have repeatedly adapted to technological change—from paper tools to electronic records—while never abandoning core principles such as consumer protection, market integrity, and systemic stability.”
The above summarizes ASIC’s FinTech head’s interpretation of cryptocurrency as a financial innovation built on technological architecture. For more detailed coverage of Australian regulatory nuances, stay tuned to Bitaigen’s (Bitgen) upcoming reports.
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