Australia Moves Toward New Crypto Regulation Framework

Australia is moving closer to introducing a clearer regulatory system for digital asset platforms after a Senate committee supported a new crypto oversight bill.

Key Takeaways

• An Australian Senate committee has backed the Corporations Amendment (Digital Assets Framework) Bill 2025.
• The bill would require crypto platforms and custody providers to obtain an Australian Financial Services Licence.
• Companies that manage customer digital assets would fall under existing financial services rules.
• Firms would receive a six month transition period to comply if the law is approved.

What Happened?

The Senate Economics Legislation Committee released a report supporting the proposed Corporations Amendment (Digital Assets Framework) Bill 2025, saying it would significantly strengthen the regulation of digital assets in Australia. The bill aims to integrate crypto service providers into the country’s existing financial services system.

Lawmakers say the proposal could modernize Australia’s digital asset oversight while improving safeguards for investors and consumers.

Senate Committee Supports Digital Asset Framework

Australia is taking another step toward building a comprehensive regulatory system for the cryptocurrency industry. On March 16, the Senate Economics Legislation Committee released a report recommending the passage of the Corporations Amendment (Digital Assets Framework) Bill 2025.

The committee described the proposal as a substantial improvement to the regulation of digital assets, noting that creating rules that manage risks while remaining technology neutral is a difficult task.

If passed, the legislation would integrate crypto platforms and digital asset custody providers into Australia’s existing financial services framework. The measure seeks to modernize oversight while applying traditional market protections designed to protect consumers.

The bill would amend the Corporations Act, 2001 and the Australian Securities and Investments Commission Act, 2001 to introduce a structured licensing and compliance regime for companies that handle digital assets on behalf of customers.

Crypto Platforms Would Need Financial Services Licenses

Under the proposed framework, businesses operating digital asset trading platforms or custody services would be treated similarly to traditional financial service providers.

These companies would be required to obtain an Australian Financial Services Licence (AFSL) and comply with rules governing:

• Custody and safeguarding of customer assets.
• Execution of transactions.
• Disclosure requirements for retail clients.
• General compliance and market conduct obligations.

Regulators believe that intermediaries holding customer funds or facilitating trading present the greatest potential risk in the crypto ecosystem. Because of this, the bill focuses on regulating service providers rather than the blockchain technology itself.

The proposal would also introduce legal definitions for key terms such as digital tokens, helping clarify how existing financial laws apply to crypto related services.

Six Month Transition Period for Companies

If the bill becomes law, companies that currently operate without an Australian Financial Services Licence would be given six months to obtain authorization and comply with the new regulatory requirements.

The transition period is intended to allow existing businesses to adjust their operations without sudden disruptions.

The bill was introduced by the Treasury in November 2025 and later passed its third reading in the House of Representatives on February 4 before moving to the Senate for further review.

Industry Feedback and Concerns

During the committee inquiry, industry groups including exchanges, fintech associations, and law firms submitted feedback on the proposed framework.

Many stakeholders welcomed the effort to modernize the country’s regulatory approach and provide greater clarity for digital asset businesses.

However, some participants raised concerns about the scope of certain definitions in the draft legislation. Terms such as digital token, possession, and factual control could potentially affect infrastructure providers or services that do not directly hold customer funds.

According to the committee report, the Treasury defended much of the current draft while suggesting that certain issues could be addressed through future regulations.

Australia Already Has Some Crypto Rules

Australia already imposes certain compliance requirements on cryptocurrency exchanges.

Companies offering digital currency exchange services must register with the Australian Transaction Reports and Analysis Centre (AUSTRAC) before operating. This registration focuses primarily on anti-money laundering and counter terrorism financing compliance.

The proposed legislation would expand beyond those requirements by creating a broader licensing and market conduct framework for digital asset service providers.

The bill still needs final approval from the Senate before becoming law.

CoinLaw’s Takeaway

In my experience covering crypto regulation, the biggest challenge for any country is finding the balance between innovation and investor protection. I found that Australia’s approach in this bill tries to strike that balance by targeting crypto intermediaries rather than the technology itself.

This approach makes sense because most risks in the industry usually arise from custody failures, poor compliance, or mismanagement of customer funds. If the licensing system is implemented carefully, it could bring more trust to the local crypto market without slowing blockchain innovation.

For exchanges and custody providers, the message is clear. Regulation is coming, and preparation will be essential.

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