Key Highlights
- Australia’s new digital-asset bill sets its first full crypto framework, requiring exchanges and custodians to secure an AFSL licence.
- The rules target platforms that hold client assets, ensuring oversight that adapts as tokenisation and new digital services emerge.
- Small operators get exemptions, and firms have 18 months to comply, with civil penalties applying for custody or service breaches.
Australia has adopted its first holistic regulations for crypto players, with the clear purpose of protecting customers’ assets and bringing clarity to the market.
Treasurer Jim Chalmers and Financial Services Minister Daniel Mulino introduced the Corporations Amendment (Digital Assets Framework) Bill 2025. This bill will require crypto exchanges and custody providers to hold an Australian Financial Services Licence (AFSL).
Minister Mulino told the House, “Across the world, digital assets are reshaping finance. Australia must keep pace. If we get this right, we can attract investment, create jobs and position our financial system as a leader in innovation.”
Why are the new rules needed
The bill focuses on platforms that hold crypto for clients rather than the underlying blockchain technology, allowing regulation to adapt as new forms of tokenisation and digital services emerge. Currently, some companies can hold unlimited client crypto without safeguards, increasing the risk of scams and fraud like FTX.
Today, most trading platforms only need to register with the Australian Transaction Reports and Analysis Centre (AUSTRAC), a light-touch system covering hundreds of exchanges, including many inactive ones.
Under the proposed law, custodial platforms will face stricter obligations, with Mulino emphasising that regulation should focus on “the businesses that hold users’ crypto, not the technology.”
How the framework works
The legislation introduces two new financial product categories:
- Digital Asset Platforms (DAPs): They handle client crypto and provide transactional services such as buying, selling, staking, and facilitating transfers.
- Tokenized Custody Platforms (TCPs): They manage real-world assets and issue redeemable tokens against those assets. Holding a token gives clients rights to redeem or direct delivery of the underlying asset.
The platforms should ensure minimum standards for transactions, settlements, and asset protection; issue clear guides to clients explaining their services, fees, governance rights, and the risks.
Some companies are exempt from licensing, including those with less than $10 million in annual transaction volume or for whom crypto activity is merely incidental to their primary business. Additionally, there is an 18-month grace period on licensing to facilitate the transition of businesses.
Regulatory powers and next steps
The bill also clarifies regulatory responsibilities:
- Platforms and operators run by constitutionally covered corporations are treated as financial products and services under certain conditions.
- Activities such as performing consensus operations on public blockchain infrastructure are specifically excluded from being defined as financial services.
- The bill is likely to pass the House easily and will then move to the Senate, where support from the crossbench or opposition may be needed.
- Ministers can declare platforms as financial markets or exempt them, considering financial stability, competition, and advice from regulators like ASIC, APRA, AUSTRAC, and the Reserve Bank.
- Civil penalties apply for breaches of assetholding, transactional, settlement standards, or ministerial prohibitions.
Officials say the bill could unlock $24 billion in productivity gains annually while ensuring that firms cannot hold client assets without proper safeguards. Minister Mulino highlighted the risks of fraud and scams, emphasizing that the legislation aims to “reduce loopholes and ensure comparable activities face comparable obligations.”
While this is a positive step, some regulatory gaps remain, and the industry will need further clarity on how the rules will operate in practice.
Also Read: Abu Dhabi FSRA Approves Ripple’s RLUSD as Regulated Stablecoin
