The federal government has begun consultation on draft legislation regulating operators of platforms that hold digital assets on behalf of customers.

It proposes two new categories of financial products under the Corporations Act – digital asset platforms and tokenised custody platforms.

Operators of these platforms will have to hold an Australian financial services licence and be subject to obligations such as meeting minimum standards for asset-holding and transaction/settlement processes; having platform rules; and providing a guide – a document similar to a product disclosure statement.

“Digital assets are a rapidly evolving part of the economy, offering opportunities for new products and productivity gains,” the government said.

“The potential benefits of these assets are far-reaching, from streamlining payments systems to transforming how we invest and do business

“Our approach will help industry to identify opportunities and manage risks, unlock innovation, protect consumers and uphold market integrity.”

Platforms will not require a financial services licence if they hold no more than $5000 per client, facilitate less than $10 million in transactions a year and notify the Australian Securities and Investments Commission.

Law firm Gilbert + Tobin said: “Importantly, the new obligations will not apply to digital asset issuers themselves or to businesses that create or use digital assets for non-financial purposes.”  

The consultation is open until October 24.