Australia's approach to cryptocurrency regulation promotes innovation and protects investors

Australia Unveils Comprehensive Crypto Regulation Framework

Australia is taking significant steps to bring cryptocurrency exchanges and digital asset custody services under its financial licensing system. This initiative is designed to enhance investor security, stimulate economic growth, and keep pace with international regulatory standards. The Corporations Amendment (Digital Assets Framework) Bill 2025, presented by Treasurer Jim Chalmers and Financial Services Minister Daniel Mulino, marks the nation’s first all-encompassing set of rules for digital asset platforms and tokenized custody providers. The bill successfully passed its initial reading in Parliament on November 20, 2025.

Under the proposed legislation, all operators must secure an Australian Financial Services Licence (AFSL) and are subject to oversight by the Australian Securities and Investments Commission (ASIC).

Key Features of the Bill

• Platform Categories: The framework distinguishes between digital asset platforms, which handle activities like crypto trading and staking, and tokenized custody platforms, which issue tokens backed by real-world assets such as real estate or commodities.
• Strict Compliance: Operators are required to meet rigorous standards for transparency, efficiency, and asset security, following ASIC’s guidelines for custody and settlement.
• Exemptions for Small Operators: Platforms managing less than $5,000 per customer or with annual volumes under $10 million are not required to obtain full licensing, a measure intended to support innovation while maintaining essential protections.
• Enforcement and Penalties: Failure to comply can result in substantial fines, aiming to prevent mismanagement and fraudulent activities.

Government and Industry Perspectives

Officials highlighted that the new framework addresses major regulatory gaps in the crypto sector. The government estimates that integrating digital assets more seamlessly into the economy could boost annual productivity by as much as $24 billion. James Volpe, founder of Melbourne-based Web3 education company uCubed, praised the approach for allowing early-stage projects to experiment without immediate licensing requirements, striking a balance between encouraging innovation and protecting consumers.

These reforms also bring Australia in line with global efforts to clarify digital asset regulations, echoing initiatives like the U.S. GENIUS Act and updated SEC policies.

Recent Regulatory Developments

The bill follows ASIC’s October 2025 revision of Information Sheet 225, which clarified that many tokens and stablecoins are considered financial products under current laws. This update further strengthens regulatory expectations for custody, fund management, and yield-generating crypto products. Australia’s proactive stance aims to harness the economic benefits of blockchain technology while reducing risks linked to unregulated crypto activities.

Industry Response and Future Outlook

While the new framework has been broadly welcomed by industry participants, some have advocated for more straightforward rules and clearer definitions. The government emphasized the vital role of blockchain in driving economic progress, stating that these reforms will enhance protections for Australians who use private digital asset platforms. As the bill moves through Parliament, its adoption is expected to influence how other countries approach the integration of cryptocurrencies with traditional financial systems.