Australian Regulator Undertakes Developing a Roadmap to Enable New Policies on Crypto

• – APRA, the Australian Prudential Regulatory Authority, announced its expectations on risk management and made the necessary publications.
• – In particular, the Australian regulator announces a certain management expectation for institutions and organizations that have been involved in activities related to crypto-assets.
• – In addition, there is a policy-map determined until 2025, as seen in the regulator’s publications. The impact of new policies on the media occupies a large place. For this reason, all information is in the continuation of the article.

As stated in its APRA statements, it has announced its expectation for all regulated entities in activities related to crypto-assets. It states that it should proceed cautiously on its expectations. It also states that, together with their regulators, organizations should pay attention to the risks associated with the investment and venture movements related to crypto-assets. It focuses on the successful analysis and management of risks on the subject.

According to the regulator, it is also stated that progress has been made in consultation with regulators abroad. The focus is on activities for crypto assets along with other regulators. In this way, it is also taken into account that development has taken place with a long-term precautionary framework.

APRA’s Purposes Under the Policy Roadmap

Along with its statements, APRA also highlights the goals in the roadmap it wants to realize with its policy. In particular, important issues are addressed in the draft of the road, in which the following items predominate:

• – Focus on crypto activities After the Basel Committee has carried out the current consultation and finalized the transactions, it is stated that crypto-asset exposures should be best addressed by Australian institutions, which are authorized, depositors. In Australia, the date set for this consultation to take place appears to be 2023, and the APRA provisionally also cites initial precautionary guidance.
• – The focus on operational risk should be focused on control effectiveness, business continuity, and operational risk management determined for service provider management. In this way, it will be possible to advance and develop new and revised requirements in the best way possible. The date set for the draft precautionary standard appears to be mid-2022.
• – Focus on stablecoins agency will focus on identified approaches to prudent regulation of stablecoins. As noted in this study, the development of a broader legal and regulatory framework will be faced, and APRA also aims to hold a meeting on precautionary requirements against large stored value facilities in 2023.

According to the detailed statements made by APRA, their expectations from organizations are as follows:

Especially for institutions that will carry out activities related to crypto-assets, attention should be paid to the determination of the situation in the best way and to keep the risks on the subject to a minimum.

• – If dealing with crypto-assets involves connecting with third parties, then Australia’s precautionary standards must be adhered to before establishing trust. In particular, the principles and requirements should be studied in the best way.
• – Finally, it should be noted that the reports on the main risks associated with the new venture will need to be reviewed, along with the implementation of strong risk management controls.

APRA continues its role as a prudent regulator in Australia’s financial services industry by addressing these considerations. The agency is tasked with supervising members of many industrial activities such as banks, and credit unions. The purpose of APRA is to audit institutions with total assets of US$5.9 trillion for Australia’s depositors, and pension fund members.