We are pleased to provide KPMG Australia’s response to Treasury’s proposed framework for regulating digital asset platforms. In our analysis, we explore key aspects of the framework, highlighting areas that may benefit from further consideration.
KPMG supports the principle of leveraging existing financial services and regulatory regimes to regulate digital asset platforms as reflected in the proposed framework. We believe broader encompassing regulation in the first instance will provide for greater certainty, uniformity, and minimal regulatory duplication.
KPMG considers that a regulatory framework should aim to be as technology neutral as possible, to ensure it applies appropriately to the digital asset landscape now but also to future advancements in technology.
As with any regulation, it is important to ensure that any regime achieves an appropriate balance of minimising risks without stifling innovation or driving activity offshore or away from cooperative or well-intentioned stakeholders within the industry.
In our analysis, we explore key aspects of the framework, highlighting areas that may benefit from further consideration. Our aim is to contribute to well-informed and constructive discussion to assist the further development of an effective framework for regulating digital assets.
KPMG’s principal recommendations are:
- An effective monitoring system must be introduced to support the operation of the safe harbour to ensure that individuals and businesses continue to satisfy the “non-financial purpose” requirement.
- The exemption for low value facilities may be difficult to monitor given fluctuations in value. Consideration could be given as to whether the dollar amount thresholds should be assessed on an ongoing basis (i.e. at any given point in time), or over a reasonable time period to allow for fluctuations and also to enable providers to take action in response to reaching a threshold.
- Any difficulty encountered by professional financial advisors could be overcome in the near term through recognised qualifications and licensing, similar to other classes of regulated assets.
- The creation of an offence for failure to make reasonable efforts to identify, prevent and disrupt market misconduct.
- The creation of an offence for market misconduct in respect of digital assets.
KPMG looks forward to continuing to contribute to the development of a framework for regulating digital asset platforms.
