AUSTRALIA Law and Practice Contributed by: Steven Pettigrove, Katrina Sharman, Luke Higgins and William Deeb, Piper Alderman
Key considerations include: • a size threshold (approximately AUD200 million in stored value), above which issuers are classified as major SVFs and become subject to prudential oversight; • dual regulation, with ASIC retaining conduct over- sight and APRA assuming prudential supervision; • capital and liquidity requirements, including hold- ing sufficient capital relative to liabilities to support redemption; • governance and risk management obligations, including operational resilience and third party risk controls; and • mandatory registration and ongoing supervision by APRA, including compliance with prudential standards. 7. Tokenisation and Real-World Assets 7.1 Treatment The tokenisation of traditional financial assets has been a topic of considerable interest in Australia; notwithstanding, the regulatory position has evolved following the enactment of the DAF Act.
In substance, Australia continues to adopt a technol- ogy neutral approach, such that tokenised assets are regulated by reference to the underlying rights and features, rather than the fact that they are issued on a blockchain. Accordingly, where a tokenised asset constitutes a “financial product” (eg, a security, deriv- ative or interest in a managed investment scheme), it remains subject to the same regulatory treatment as its non tokenised equivalent under the Corporations Act. The DAF Act introduces a bespoke regime for interme- diaries involved in tokenised markets, including TCPs, which facilitate the tokenisation of real world assets. Additional licence authorisations may be required to issue, offer or distribute tokenised assets. TCPs are treated as financial products in their own right and must hold an AFSL and comply with con- duct, custody, disclosure and asset holding obliga- tions. Critically, TCP operators must ensure that tokenised real world assets (other than money) are held on a one to one basis and redeemable by the token holder.
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