ASIC Chairman: Blockchain technology has the potential to change finance

The chairman of the Australian Securities and Investments Commission ( ASIC ) believes that blockchain technology has the potential to fundamentally change the existing global financial system.

Greg Medcraft , who was appointed chairman of the Australian Securities and Investments Commission in 2011 , made the recommendations in a speech at Carnegie Mellon University in Australia earlier this week.

According to Medcraft , decentralized technology is more efficient, faster, and disintermediates, reducing transaction costs and improving market access.

Following a brief description of blockchain’s characteristics, Medcraft also points out a number of factors that contribute to its potential:

“ Of course, harnessing this potential depends on the integrity, capacity and stability of blockchain technology. It also depends on the willingness of the industry to invest in and use this new way to settle and register transactions. ”

“ Nevertheless, the potential is huge. The industry is bullish on this potential and is looking forward to seeing how it benefits the market, ” he continued.

Regulation and innovation

Medcraft went on to discuss the various ways regulators are responding to blockchain technology, saying:

“ I have just spoken about the opportunities that blockchain presents. But, as I have just said, those opportunities can also threaten our strategic priorities of investor trust and of building fair, orderly, transparent, and efficient markets. ”

He said that while it is not possible to know exactly how blockchain technology will evolve, he believes it will continue to evolve.

Medcraft also said the influence of regulators is far-reaching, but should not hinder innovation.

“ As regulators and policymakers, we need to ensure that what we do mobilizes opportunities and expands economic benefits, without hindering the path of innovation and development. At the same time, we also need to mitigate the risks that come with these developments that are consistent with our goals. We need to ensure that those who trust this technology benefit from it, ” he said.

ASIC’s response

Medcraft said ASIC was working to ensure opportunities arising from innovation were exploited and was focusing on five key areas, including the education of market participants.

In addition, the Chairman pointed out that ASIC would also be involved and provide guidance to industry players.

“ I want to mention two specific activities, the first is our cyber resilience work, and the second is our innovation center. It was designed to allow startups and financial technology companies to use the regulatory system that we manage more quickly and conveniently, ” he added.

The Chairman firmly believes that oversight is key, explaining that ASIC monitors the market to understand not only how investors use technology and financial products, but also the risks that may arise. He said:

“ Regulators need to understand a number of issues with blockchain, including who is responsible for restoring the blockchain if its security is compromised, how transactions using the blockchain are reported, and how regulators are used. ”

Finally, Medcraft highlighted ASIC ’s role in enforcement and issuing policy advice, while noting that the commissioner will continue to monitor regulation:

“ We will continue to review current regulatory frameworks, analyse how new developments such as blockchain fit into those frameworks and identify any changes that may be needed. ”

The chairman's comments come after the Australian Senate Economic References Committee declared that digital currency transactions should be treated in the same manner as fiat currency transactions when it comes to goods and services tax.