APRA works on setting up cryptocurrency policy roadmap by 2025
As per the release, Australian
Prudential Regulation Authority, or APRA which is Australia's financial
regulator recently published a letter to outline a policy roadmap for effective implementation of cryptocurrency-related activities by 2025.
The authority’s chairman Wayne Byres confirms that it will be a longer-term prudential framework for crypto-assets and related activities in Australia. The release further added areas like control effectiveness, businesses continuity, and service provider management will be provided with advanced requirements for operational risk management.
This year the company is planning to have a discussion with the Bank for International Settlements (BIS) Basel Committee on Banking Supervision before revealing crypto-asset requirements, which will take effect in 2025.
In mid-2022, a draft standard will be released. “While activities associated with crypto assets are still relatively limited in Australia, the potential scale and risks of such activities could become significant over time,” chairman Wayne Byres said in the letter. As per the letter, regulatory entities engaging in crypto asset activities were instructed to engage with their supervisory agencies, and it outlined specific risk management measures and standards applicable to various cases. The regulatory framework also provides banking exposure to crypto-assets, operational risk, and stable coins. The agency will discuss with international regulators so as to make sure about a consistent approach to crypto asset operations.
The authority is discussing with other regulators internationally, to ensure consistency in approach. Starting in 2023, the APRA plans to consult on requirements for handling crypto exposures. Later this year a draft that is standard for operational risk will be released and will be implemented in 2024. A proposed regulatory framework for stored-value facilities is being developed by APRA in collaboration with other members of the National Council of Financial Regulators. Consultations are expected next year and a standard is expected to come into effect in 2025.
In July crypto regulation recommendations were submitted to the government by Blockchain Australia. Earlier this month in a speech to the American Chamber of Commerce Byres announced the coming release of the letter and placed it in the context of the agency’s larger plans. To provide crypto services to its 6.5 million customers of Commonwealth Bank of Australia, the bank is attempting to expand a trial program.
As a statutory authority, the APRA oversees the sectors responsible for the stability of the financial system in Australia. Before engaging in cryptocurrency activities, all regulated entities must conduct a comprehensive risk assessment.
CBW - External Analyst