Australian Securities & Investments Commission paper argues for substance based regulation of digital assets

The Australian Securities & Investments Commission published a conference paper by Dr Rhys Bollen (Senior Executive Leader, FinTech) setting out the case that digital assets and distributed ledger technology should be regulated primarily by reference to economic substance rather than technological form. The paper argues that core principles in Australian financial services law, including technology neutrality, functional regulation and proportionality, remain workable for crypto-assets, stablecoins, tokenised securities and decentralised finance. The analysis maps digital asset activities to enduring financial functions of capital allocation, payments and risk management, and to Australia’s layered regulatory approach spanning consumer protection, financial services regulation and (where warranted) prudential oversight. It highlights practical challenges including classification uncertainty, decentralised governance structures, composability and cross-border activity, and contends that regulatory obligations should attach based on practical control and benefit rather than claims of decentralisation. The paper also points to ASIC Information Sheet 225 as applying existing Corporations Act concepts to digital assets and placing emphasis on intermediaries and custody-related harms, and discusses the recently introduced Corporations Amendment (Digital Assets Framework) Bill 2025 as integrating “digital asset platforms” and “tokenised custody platforms” into the existing framework with tailored licensing, conduct, disclosure and asset-holding standards and exemptions for smaller platforms.