Blockchain and cryptocurrency technologies perform many of the same roles as existing financial infrastructure and therefore should not automatically be classified as separate asset classes when regulators design legislation, according to the fintech chief of Australian Securities and Investments Commission.
In a paper presented at the Melbourne Money & Finance Conference on Wednesday, ASIC’s head of fintech Rhys Bollen said crypto should be regulated based on its “economic substance rather than technological form.”
Bollen explained that tokenized securities should fall under existing securities laws, while stablecoins should be regulated through payment services legislation. Other areas of the crypto sector, he added, may instead fall under consumer protection regulations.
His perspective differs from crypto-specific regulatory frameworks adopted in other regions, such as the Digital Asset Market Clarity Act in the United States and the Markets in Crypto-Assets Regulation in Europe.
Bollen argued that the three core functions of finance — capital allocation, payments and risk management — have continually evolved alongside new technologies. Because of this, distributed ledger technologies like Blockchain should not be treated differently simply because they use a new technological framework.
“Digital assets largely represent new technological instances of longstanding financial activities. While the mechanisms of issuance, transfer and record-keeping have changed, the underlying economic functions served by these instruments have not.”
“Regulatory systems have continually adapted to technological change — from paper-based instruments to electronic records — without abandoning core principles such as consumer protection, market integrity and systemic stability,” Rhys Bollen said.
Australia not pursuing a single sweeping crypto law
According to Bollen, Australia is already moving toward this approach in its regulatory strategy. Rather than introducing one comprehensive crypto law, the country’s primary legislation — the Digital Asset Framework bill — aims mainly to update and amend sections of the Corporations Act 2001 to incorporate digital asset activities.
“The Bill does not abandon the existing financial services framework. Instead, it introduces tailored amendments that integrate digital asset platforms into the established regulatory architecture.”
The Australian crypto market has also received regulatory guidance through ASIC Information Sheet 225, which states that existing definitions of “financial product” and “financial service” under the Corporations Act 2001 can already apply to digital assets.
According to Rhys Bollen, the guidance clearly rejects the idea that digital assets should automatically be treated as a separate asset class for regulatory purposes. Instead, it indicates that a digital asset may fall within existing regulations if it functions as a security, derivative, managed investment scheme interest or a non-cash payment facility.
Bollen said that focusing on economic characteristics rather than technological labels would allow regulators to provide clearer rules for market participants while reducing the risk of regulatory arbitrage.
The guidance also focuses more on regulating intermediaries rather than the tokens themselves. Bollen noted that most consumer harm in the digital asset industry has come from the behavior of crypto platforms offering services such as custody, trading, lending or yield products.
Decentralized products remain difficult to regulate
Bollen acknowledged that regulatory classification can become more complicated when dealing with decentralized products or services. However, he said legal analysis should focus on who actually exercises control and receives the benefits, rather than simply relying on claims that a platform is decentralized.
“Where identifiable parties exercise influence over protocol design, governance, or economic outcomes, regulatory obligations can and should attach.”
