ASIC says economic substance trumps tech

Mike Taylor

Managing Editor and Publisher

16 March 2026

The Australian Securities and Investments Commission (ASIC) has sent a clear signal that it will continue to back economic substance over technological form.

The message has been sent in an address by ASIC’s senior executive leader, FinTech, Dr Rhys Bollen in a paper presented at a conference at the University of Melbourne in which he argues that financial services have historically evolved through successive technological shifts, while retaining stable economic functions: capital allocation, payments, and risk management.

Drawing on financial history, Australian financial services law and emerging international standards, Bollen’s paper to the conferences argued that digital assets can and should be regulated primarily regulated “by reference to economic substance rather than technological form”.

“While certain features of digital assets justify tailored regulatory responses, the core regulatory principles of technology neutrality, functional regulation, and proportionality remain both viable and desirable in the digital economy,” he said.

Bollen’s paper argues that digital assets largely represent new technological instances of longstanding financial activities.

“While the mechanisms of issuance, transfer and record-keeping have changed, the underlying economic functions served by these instruments have not. Financial history demonstrates that regulatory systems have repeatedly adapted to technological change – from paper instruments to electronic records – without abandoning foundational principles such as consumer protection, market integrity and systemic stability,” his presentation said.

“The tendency to treat digital assets as fundamentally different risks repeating a familiar regulatory policy error: confusing technological novelty with economic novelty,” it said noting that similar claims were made during the initial emerge of e-commerce, dematerialisation of securities and the rise of electronic payments.

“In each case, regulators and policymakers ultimately responded not by discarding existing legal frameworks, but by extending and adapting them to new products and services, and new forms of intermediation,” Bollen’s presentation said.

“The central argument in this paper is that digital assets should be regulated primarily by reference to economic substance rather than technological form. This approach is consistent with Australian financial services law, comparative jurisprudence, and emerging international regulatory standards.”