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Australia is taking a significant stride towards regulating its burgeoning cryptocurrency sector with the introduction of new draft legislation. The "Corporations Amendment (Digital Assets Framework) Bill 2025" aims to bring digital asset platforms and tokenised custody platforms under the purview of existing financial services laws, enhancing consumer protection and market stability.
Key Takeaways
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New legislation introduces two distinct financial product categories: digital asset platforms and tokenised custody platforms.
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Platforms must obtain an Australian Financial Services Licence (AFSL) to operate.
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Exemptions are in place for smaller, lower-risk platforms processing under $10 million annually or holding less than $5,000 per customer.
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Penalties for non-compliance can be substantial, including fines up to 10% of annual turnover.
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The bill seeks to align Australia with international regulatory standards.
Comprehensive Regulatory Framework Introduced
Treasurer Jim Chalmers and Financial Services Minister Daniel Mulino introduced the bill to Parliament, marking Australia's first comprehensive regulatory framework for businesses handling digital assets on behalf of customers. The legislation aims to close regulatory gaps that have left billions in client assets potentially unprotected, drawing parallels to global failures like FTX.
The bill establishes "digital asset platforms" for entities holding client crypto assets and offering transactional functions, and "tokenised custody platforms" for those handling real-world assets tokenised into digital forms. Both will require an Australian Financial Services Licence (AFSL) and must operate "efficiently, honestly and fairly," adhering to ASIC's custody and settlement standards.
Balancing Innovation and Protection
While the new rules are designed to bolster consumer trust and market integrity, exemptions are provided for smaller platforms. Those processing less than $10 million annually or holding under $5,000 per customer are exempt from full licensing requirements. This approach aims to allow early-stage experimentation without imposing undue burdens on nascent businesses.
However, industry experts have raised points for consideration. Concerns include the practical application of the new rules, the cost of compliance for Australian operators, and the fact that Australia is now following other major markets that have already established clearer digital asset regimes. The "definitional detail" and the need for tax clarity are also highlighted as areas requiring further attention.
Global Alignment and Future Steps
Australia's move aligns with global trends, including Europe's Markets in Crypto-Assets (MiCA) framework and regulatory actions in the United States. The government's strategy involves extending existing financial services laws rather than creating an entirely new system, aiming for efficiency and leveraging familiar regulatory tools.
A formal consultation period for the draft bill is now open, with submissions due by October 24. The government intends to refine the legislation based on feedback before moving towards implementation, striving for a balanced approach that legitimises responsible operators while deterring misconduct and ensuring consumer protection.
Sources
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Australia moves forward with bill to regulate crypto under finance laws, mx.advfn.com.
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Australia Moves to Regulate Crypto Platforms Under New Consumer-Protection Law, Decrypt.
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Australia Drafts Law to Regulate Crypto Financial Framework, Ventureburn.
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Draft legislation gets Australia a step closer to crypto regulation, SmartCompany.
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