financial product crypto

Here We Go: A Top Gov MP Says Crypto Should Be Regulated as Financial Products

3 min read

This article is for general information purposes only and isn’t intended to be financial product advice. You should always obtain your own independent advice before making any financial decisions. The Chainsaw and its contributors aren’t liable for any decisions based on this content.



Australian Assistant Treasurer and Minister for Financial Services, Stephen Jones, has said that there are “good arguments for treating certain cryptocurrencies as a financial product under the law”. Here’s what he had to say and what it may mean. Firstly, a brief explainer on ‘financial products’.

Is crypto a ‘financial product’?

Without diving too deep into the legalese, a ‘financial product‘ in this context is best viewed as a financial investment where an investor gives money to another person or entity with the view of generating a return and where the investor has no day-to-day control over the use of the contribution.

Australian Assistant Treasurer and Minister for Financial Services, Stephen Jones. Source: Sydney Morning Herald

It may sound a little complex but in simple terms, you can think of them as including things like securities (such as shares) or managed investment schemes (such as investment funds).  

Okay, so if a specific crypto is a ‘financial product’, what’s the big deal? Well, it turns out that there may be a number of potential consequences. In terms of slew of Australian laws and regulations, those issuing cryptocurrencies may be required to hold a financial services license and comply with the following: 

  1. Financial disclosures (such as product disclosure statements);
  2. Anti-money laundering and know-your-customer laws; and 
  3. Consumer protection laws.

Importantly, the list above isn’t exhaustive and there are conceivably other implications that are yet to be considered. Now with that said, what did the Minister have to say?

Regulation on the horizon

Crypto regulation was earmarked as one of the Labor government’s key focus areas, which included a so-called ‘token-mapping exercise’. The need for regulation was “beyond doubt” in Jones’ mind, particularly after the FTX implosion. Specifically, the concern seems to centre around whether cryptocurrencies are unregulated financial products, or something else. 

“I don’t want to pre-judge the outcomes of the consultation process we are about to embark on. But I start from the position that if it looks like a duck, walks like a duck and sounds like a duck then it should be treated like one.”

He suggested that he wasn’t “attracted to setting up a completely separate regulatory regime for something that is, for all intents and purposes, a financial product.” Jones’ has previously been vocal in his view of the crypto sector, having previously blamed the former government for not doing enough to protect consumers.

One of the critical topics of debate is whether the government should design legislation that would classify all crypto assets as financial products. While this position is supported by financial services watchdog, the Australian Securities and Investments Commission (ASIC) and the Commonwealth Bank, it is opposed by Blockchain Australia who have cited harm to investment and crypto jobs. 

Interestingly, Jones said that bitcoin was “attempting to replicate or replace traditional forms of currency,”  saying this did not necessarily make it a financial product. However, he added that “other coins or other tokens are being essentially used as a store of value for investment and speculation. [There is a] good argument that they should be treated like financial products,” he added.

Stephen Jones

Speaking with The Chainsaw, Jeremy Majid, CEO of the Australian Bitcoin Industry Body commented on the Minister’s statement saying:

“It would be nonsensical to describe Bitcoin as a financial product. It has no owner; there is no organisation behind it who would be responsible for writing a product disclosure statement for example. Regulation may help somewhat if it ensures that local exchanges have custody of their assets in Australia, but ultimately consumers can protect themselves by learning the difference between Bitcoin and crypto and taking custody of their bitcoin: not your keys, not your coins.”

It’s worth noting that at this point, the Minister’s comments are merely a signal of his position, but not necessarily the ultimate position that the government will take. The long-awaited ‘token-mapping exercise’ is undoubtedly going to provide further clues in that regard, the findings of which is expected to be released later this year. Let’s see where that takes us. For now, continued regulatory uncertainty prevails.