Rhys Bollen, responsible for financial technologies at the Australian Securities and Investments Commission (ASIC), has argued that the regulation of crypto-assets should focus on their economic functions rather than the technology underpinning them. Speaking at the Melbourne Money & Finance Conference, Bollen elaborated on how Australia’s regulatory authorities are approaching blockchain and digital assets, outlining why a function-based viewpoint could better serve the public interest.
Viewing Blockchain Assets Through the Lens of Traditional Finance
Bollen highlighted that blockchain-based assets ultimately perform the same fundamental roles as traditional financial products. In his view, while the technology facilitating transactions and maintaining records has evolved, the essential activities—such as payments, capital allocation, and risk management—remain unchanged. For Bollen, the main distinction is technological infrastructure rather than the core financial functions these assets fulfill.
He has urged that regulatory frameworks prioritize the economic purpose of digital assets over their technical features. For example, tokens qualifying as securities should be directly subject to capital markets regulations, whereas stablecoins utilized for transactions should fall under payment services legislation. Bollen emphasized the importance of categorizing assets by their function to ensure regulatory clarity and effectiveness, rather than focusing on the novelty of blockchain technology.
Bollen underscored that the central question regulators need to ask is, “What role does a digital asset play within the financial system?”
He also reminded the audience that the financial sector has historically adapted quickly to technological change without sacrificing key principles such as consumer protection, market integrity, and financial stability. Bollen pointed to these enduring foundations as reasons for focusing beyond technology when shaping regulatory policies.
Aligning Regulation with Existing Legal Frameworks
Australia continues its efforts to bring digital assets within the bounds of existing legal definitions. The forthcoming Digital Assets Framework Bill aims to adapt current financial legislation rather than creating an entirely separate regulatory regime for cryptocurrencies. This approach is designed to ensure digital assets operate under familiar rules, promoting confidence and stability.
Under the bill, targeted amendments to Australia’s Corporations Act 2001 are set to extend oversight to digital asset platforms. This integration seeks to embed the burgeoning digital asset ecosystem into the country’s established financial regulatory architecture, providing a seamless transition for market participants.
Supporting this direction, ASIC’s published Guidance 225 clarifies that digital assets may be classified according to their function—as securities, derivatives, managed investment schemes, or payment instruments—falling under definitions that already exist within the legal framework. This focus on function aims to protect consumers and uphold market standards without stifling innovation.
Under the revised guidance, most issuers of stablecoins will need to obtain licenses, as these tokens are typically categorized either as non-cash payment instruments or managed investment schemes in Australia. ASIC has stated that transitional compliance measures will ease entry requirements for certain stablecoin and wrapped token providers as the new regulations take shape.
Managing Risks in Digital Asset Intermediaries
Bollen called attention to the prevailing risks within the crypto sector, noting that challenges often stem from intermediaries such as trading platforms, custodial services, and lending providers. He stressed that, rather than the intrinsic technology of tokens, risks are more commonly introduced through these service providers and their management of client assets, operational processes, and transparency.
