Friday, May 27 2022

By Alice Uribe

SYDNEY – Some Australian entities will be required to thoroughly assess risks before engaging in crypto-asset business, under new risk management expectations issued by a regulator.

The Australian Prudential Regulation Authority on Thursday published its initial risk management expectations for regulated entities that engage in activities associated with crypto-assets. The regulator has not issued any new regulatory requirements.

“In recent years, there has been rapid growth in crypto-assets and the use of distributed ledger technology,” APRA said in a letter to entities it regulates, including banks and merchants. pension funds.

“While activities associated with crypto-assets are still relatively limited in Australia, the scale and potential risks of such activities could become significant over time.”

As part of the expectation, APRA said entities must perform “appropriate” due diligence and comprehensive risk assessments before engaging in activities associated with crypto-assets. Entities should also ensure that they understand and have plans to mitigate the risks.

The regulator also said it was developing a longer-term prudential framework for crypto-assets in Australia in consultation with other international regulators.

Write to Alice Uribe at [email protected]


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