ASIC fintech chief: Crypto is finance with new plumbing rails

Crypto is getting its "just finance" moment in Australia. Speaking at the Melbourne Money & Finance Conference this week, ASIC fintech chief Rhys Bollen argued that blockchain and crypto are mostly new rails for old activities, and regulators should focus on what a product does, not the buzzwords in its tech stack. ^[1]

That framing matters because it pushes Australia toward function based rules that look a lot like existing financial regulation, and away from a bespoke "crypto asset class" carve out that would give the industry its own lane.

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"New plumbing," not a new financial system

Bollen's core claim, presented in a conference paper, is simple: crypto and blockchain largely replicate financial functions that already exist, like payments, custody, trading, fundraising, and settlement. If the function is familiar, the logic goes, the regulatory response should also be familiar. ^[2]

He drew an analogy to previous infrastructure shifts. Financial markets moved from paper based records to electronic systems without creating a whole new legal category for "electronic finance." In Bollen's view, blockchains are another infrastructure upgrade, not proof that finance has been reinvented from scratch.

This is a direct challenge to the industry's preferred narrative that "crypto is different" and therefore demands custom rules. ASIC's message sounds closer to: if it walks like a financial product and quacks like a financial product, expect financial product obligations, even if the back end is a public chain and the user experience looks like a wallet and a DEX.

Why ASIC is leaning into function based regulation

Australia's regulatory tension has been obvious for years: retail participation is high, product velocity is high, and the failure modes are not hypothetical. When trading venues blow up, stablecoins depeg, bridges get drained, or a protocol's "governance" turns into a blame game, the losses look very similar to losses in traditional markets, and the political heat lands in the same place. ^[3]

A function first approach gives ASIC a cleaner framework:

Same activity, same risk class: Custody risk is custody risk, whether assets sit in a broker omnibus account or a multisig controlled by an exchange.
Technology neutral enforcement: ASIC can argue it is not anti crypto, it is pro consumer protection and market integrity.
Less opportunity for regulatory arbitrage: If "onchain" becomes a marketing wrapper to dodge licensing or disclosure, ASIC's approach is designed to neutralize that.

For market structure nerds, this also lines up with how sophisticated players already think. A token can be "utility" in a pitch deck while trading like a high beta microcap with thin liquidity, whale concentration, and reflexive leverage. Regulators generally care less about the vibe and more about the risk transmission.

What this could mean for exchanges, brokers, and token issuers

If policymakers follow Bollen's logic, Australia's crypto industry should expect more convergence with traditional licensing, conduct, and disclosure regimes. That does not automatically mean "ban" energy, it means fewer special cases.

Trading venues and brokers: tighter expectations around market integrity

Centralized exchanges and broker style apps are the most obvious fit for existing frameworks because they already look like financial intermediaries: they take orders, route trades, custody client assets, and sometimes run internal market making.

A function based lens points to questions ASIC already asks in other markets:

How are conflicts of interest managed (especially when the venue lists, promotes, and sometimes makes markets in the same assets)?
What are the rules around custody and segregation of client assets?
What surveillance exists for manipulation, wash trading, and thin book games?

Crypto Twitter might call it "the casino," but the regulatory translation is blunt: if retail is trading spot and perps with tight UX and loose disclosures, ASIC will want the same basic guardrails that apply when the product is a CFD or another high risk instrument.

Token issuance: less magic in the word "utility"

Token launches often rely on semantic gymnastics, "not an investment," "governance only," "community token," while distribution and marketing patterns tell a different story. A function based approach pressures issuers to justify why a token is not, in substance, operating like a financial product.

That matters for:

Disclosure standards: What does the buyer actually get, and what are the material risks?
Distribution practices: Who gets allocations, what are the lockups, how concentrated is supply, what is the realistic liquidity profile?
Ongoing representations: Are teams effectively promising efforts that drive value?

If the regulator stops treating "token" as a special category and starts treating token sales as financial fundraising when they resemble it, the compliance surface area expands fast.

Stablecoins and payments: "new rails" invites old obligations

Payments is where "new plumbing" is most literal. Stablecoins are frequently sold as settlement tools, not speculative assets. But the moment a token behaves like money, regulators tend to ask money questions: reserves, redemption, liquidity management, operational resilience, and consumer disclosure.

Bollen's framing implies stablecoins may end up regulated less like exotic crypto and more like payment instruments, stored value, or other existing constructs, depending on how they are structured and marketed. Projects that want mainstream distribution, especially through fintech apps or bank adjacent channels, will likely face the sharpest scrutiny.

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DeFi is where the analogy gets stress tested

Here is the part CT will argue about: DeFi does not always map neatly onto legacy roles.

Yes, automated market makers replicate exchange functions. Lending protocols replicate credit intermediation. Derivatives platforms replicate leveraged trading. But DeFi also introduces characteristics that complicate a straight "same rules" port:

No single operator (sometimes): Who is the responsible entity when governance is diffuse, development is pseudonymous, and deployments are immutable?
Composability and reflexive leverage: Risk can stack quickly across protocols in ways that look more like a machine than a firm.
Instant global access: Jurisdiction and perimeter become enforcement challenges, not just policy questions.

So even if the function is similar, the accountability model may not be. That is the weak point of the "just plumbing" analogy: plumbing changes can alter who controls the valves.

Who's positioned where: banks, fintechs, and the "regulated onchain" trade

Bollen's view is likely welcome news for institutions that have been waiting for clearer lines. Banks and large fintechs generally prefer technology neutral regulation because it reduces headline risk. If crypto is framed as finance, then crypto can be integrated into existing risk committees, compliance programs, and product frameworks. ^[4]

On the other side, startups and offshore venues that built growth on speed, regulatory ambiguity, and meme velocity may find the runway shorter. The more Australia pushes toward function based supervision, the less room there is for "it's decentralized" as a blanket defense when users are still getting marketed to, onboarded, and liquidated.

There is also a middle cohort, the "regulated onchain" builders. They want to ship tokenized assets, stablecoin settlement, and compliant trading, but only if the rules are legible. A function first approach is legible, even if it is stricter.

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Takeaway: expect fewer exemptions, and watch the edge cases

ASIC's fintech chief is basically telling the market: stop pitching crypto as a mystical new asset class, and start treating it like financial infrastructure with familiar risks. If that view shapes policy, Australia's direction is likely toward applying existing regulatory principles to crypto activities, with adjustments where the plumbing genuinely changes accountability.

Key risk for the industry: the further a product gets from clear responsible parties, clear disclosures, and clear custody protections, the more aggressively regulators tend to respond.

What would invalidate Bollen's thesis? A wave of crypto native activity that cannot be credibly mapped to existing financial functions, or that produces systemic style failures through mechanisms legacy rules do not address. Until then, Australia's message sounds straightforward: same finance, new pipes, and the same expectation that someone is accountable when the pipes burst.

Australia’s ASIC Fintech Chief Says Crypto Is Just Finance With New Plumbing