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On April 1, 2025, Australia’s parliament enacted a landmark legislation that introduces the country’s first comprehensive regulatory framework for digital assets. This new framework mandates that cryptocurrency exchanges and custody providers obtain Australian Financial Services Licences (AFSL) within a six-month period to continue their operations legally.
Key Features of the Legislation
The Corporations Amendment (Digital Assets Framework) Bill 2025 officially aligns digital asset platforms with traditional financial (TradFi) institutions under the AFSL licensing regime. This denotes a substantial shift in how digital assets are regulated in Australia, as it aims to enhance consumer protection while still fostering innovation in the crypto sector.
New Categories Created
The legislation defines two new categories under the Corporations Act:
- Digital Asset Platforms: These platforms are responsible for holding cryptocurrencies on behalf of users.
- Tokenised Custody Platforms: This category pertains to platforms that hold tokenised real-world assets (RWAs) for users, issuing digital tokens that represent these assets.
Both platform types will have to adhere to stringent regulations similar to traditional financial services. This includes safeguarding client assets, maintaining compliance with legal disclosure requirements, avoiding misleading practices, and establishing proper dispute resolution systems.
Regulatory Approach
Instead of direct regulation of cryptocurrencies, the Australian Government has opted to focus on regulatory measures for the platforms that manage and control consumer assets. This approach aims to minimise risks to consumers while allowing the burgeoning digital assets industry to thrive.
Amy-Rose Goodey, the CEO of the Digital Economy Council of Australia, emphasised that this legislation is the culmination of extensive discussions and efforts by various stakeholders, marking a significant step towards practical implementation for businesses operating within Australia.
“It’s now about how this works in practice, licensing, implementation, and how these settings work for real businesses operating in the real world.”
— Amy-Rose Goodey, CEO of the Digital Economy Council of Australia
Industry Reactions
The new regulatory framework has been met with enthusiasm. Jason Titman, CEO of Swyftx, described the bill as a "momentous occasion," while a spokesperson from Kraken labelled it a significant "top-down signal" that Australia is committed to taking digital assets seriously. Kate Cooper, CEO of OKX Australia, expressed that this bill signifies a "pivotal moment" for the nation’s digital asset landscape, laying a robust foundation for ongoing institutional involvement and investment.
Economic Implications
A recent report from the Digital Finance Co-operative Research Centre (DFCRC) suggests that transitioning Australia’s financial licensing system to incorporate digital asset platforms is crucial for unlocking an estimated AU$24 billion annually in benefits for the economy. The report indicates that previous licensing systems would only yield approximately AU$1 billion of this potential gain.
By revamping licensing regulations to include digital assets, Australia could see an increase of up to AU$1.9 billion in economic benefits by 2030. The report identifies other essential measures to bolster the economy, such as establishing a Digital Financial Market Infrastructure (DFMI) sandbox that would support the transition from pilot projects to operational systems and the deployment of essential infrastructure, including tokenised government bonds and a wholesale Central Bank Digital Currency (CBDC).
Conclusion
In summary, the passing of the Corporations Amendment (Digital Assets Framework) Bill 2025 signifies a ground-breaking advancement in the regulation of digital assets in Australia. By aligning digital asset platforms with traditional financial services and implementing strict licensing requirements, the Australian government aims to increase consumer protection, mitigate risks, and stimulate economic growth. This legislative move not only sets the groundwork for a more robust digital asset economy but also positions Australia as a progressive leader in the global cryptocurrency landscape.
