Australia is advancing a significant restructuring of its cryptocurrency regulations, preparing exchanges and custodians to operate under the same stringent rules that govern the traditional financial system. This initiative aims to bring the digital asset sector under a more robust regulatory framework.
The Corporations Amendment (Digital Assets Framework) Bill 2025 has received parliamentary approval. This bill mandates that digital asset platforms and tokenized custody services must obtain a financial services license to operate. The Treasury has characterized this as a foundational element of a strategy designed to organize a sector experiencing substantial adoption alongside growing risks.
Framework Proposals
Assistant Treasurer Daniel Mulino emphasized the necessity of a framework that simultaneously protects millions of users and fosters innovation. The government's assessment is that the current regulatory environment permits companies to handle substantial volumes of cryptocurrency without adequate safeguards, leaving clients vulnerable to failures akin to those that led to the collapse of FTX. The proposed bill seeks to address these legal loopholes and implement consistent obligations for activities that already function as financial services, even when utilizing crypto technology.
The proposal establishes two distinct categories: one for digital asset platforms and another for tokenized custody services. Both categories are required to operate with efficiency, honesty, and fairness. Key obligations include disclosing asset storage methods, maintaining robust governance and risk controls, avoiding deceptive practices, and providing mechanisms for dispute resolution and compensation. The Australian Securities and Investments Commission (ASIC) will be responsible for overseeing these requirements and enforcing minimum standards for processing, settlement, and custody. Furthermore, companies will be required to furnish detailed disclosure documents that clearly explain their services, associated fees, and inherent risks.
Supporting Tokenization Expansion
The new regulation broadens the sector's legal scope. Any entity involved in advising on, trading, or intermediating cryptocurrency transactions will be subject to mandatory licensing. This represents a shift from the current system, which primarily requires AUSTRAC registration and compliance with Anti-Money Laundering/Know Your Customer (AML/KYC) regulations. The Treasury contends that integrating the sector into the broader financial regime is crucial for supporting the expansion of tokenization. Official estimates suggest this shift could yield annual efficiency gains and cost savings of up to A$24 billion.
The bill includes exemptions for smaller operators, specifically those processing less than A$10 million in annual transactions or holding minimal client balances. Businesses that utilize cryptocurrency only incidentally to their primary non-financial activities are also excluded from the licensing requirements. The government has allocated an 18-month transition period for companies to secure their licenses without facing immediate penalties. With the Labor party holding a strong majority in the House of Representatives, the bill is now proceeding to the Senate, where additional support will be necessary for the reform to be fully enacted.