The Australian Securities and Investments Commission (ASIC) has released Consultation Paper 381 (CP 381), outlining proposals to update Information Sheet 225 (INFO 225), which provides guidance on the regulatory treatment of digital assets in Australia. This update aims to clarify the current law and provide practical examples to ensure better understanding and compliance in the evolving digital asset space.

ASIC’s proposed changes include adding 13 practical examples to demonstrate how existing financial product definitions apply to digital assets and related products. These updates come in response to stakeholder calls for greater clarity on the regulatory landscape for digital assets.

Key Objectives and Feedback Areas

ASIC’s main objective is to promote responsible financial innovation while ensuring consumer protection. ASIC Commissioner Alan Kirkland emphasized that a well-regulated financial system supports market integrity, consumer confidence, and facilitates competition and innovation.

The updates are intended to clarify how ASIC’s financial services licensing regime applies to digital assets. ASIC’s approach will remain technology-neutral, meaning that the regulatory framework for financial services will apply equally to both traditional securities and those based on digital asset platforms.

The consultation paper (CP 381) seeks feedback on the following topics:

• ASIC’s updated guidance in INFO 225, including the proposed worked examples of how digital assets are treated under current laws.
• The application of the Australian Financial Services (AFS) licensing processes to digital asset businesses, including guidance and standard conditions.
• Practical issues regarding wrapped tokens, stablecoins, and the potential transition to the Government’s proposed digital asset platform and payment stablecoin regimes.
• Potential regulatory relief, including a class ‘no action’ position for digital asset businesses seeking or varying AFS licences or Australian Markets Licences.

ASIC is seeking feedback from stakeholders on the proposed changes by 5pm on 28 February 2025. After reviewing the feedback, ASIC plans to release a final version of the updated INFO 225 by mid-2025.

Consultation Scope and Affected Stakeholders

CP 381 applies to all firms involved in digital assets, including:

• Existing financial services and financial markets businesses, particularly those exploring blockchain technology applications for traditional financial products or tokenisation of real-world assets.
• New digital asset businesses.
• Brokers and intermediaries in the digital asset sector.
• Professional advisers supporting digital asset businesses.

ASIC first published INFO 225 in September 2017 and has updated it in 2018, 2019, and 2021. This updated guidance is aligned with the Australian Government’s broader work on payment services and digital asset facility reforms.

ASIC has indicated that it will continue to use its full range of regulatory tools, including licensing, compliance, enforcement action, and updated guidance, to ensure consumer protection and uphold market integrity in the digital asset sector.