Australia's Crypto Framework Encourages Innovation While Safeguarding Investors

Australia has moved to integrate cryptocurrency exchanges and custody platforms into its financial licensing regime, a step aimed at bolstering investor protection and unlocking economic gains while aligning with global regulatory trends. The Corporations Amendment (Digital Assets Framework) Bill 2025, introduced by Treasurer Jim Chalmers and Financial Services Minister Daniel Mulino, establishes the country's first comprehensive regulatory framework for digital asset platforms and tokenized custody services. The legislation, which passed its first reading in Parliament on November 20, 2025, mandates that operators obtain an AFSL and comply with oversight by the Australian Securities and Investments Commission (ASIC).

The bill introduces two distinct categories of platforms: digital asset platforms, which facilitate crypto transactions such as buying, selling, and staking, and tokenized custody platforms, which handle real-world assets like property or commodities by issuing redeemable tokens. Operators must adhere to strict standards for efficiency, honesty, and asset protection, including ASIC's custody and settlement guidelines. Smaller platforms with less than $5,000 per customer or $10 million in annual volume are exempt from full licensing, a provision designed to encourage innovation while maintaining safeguards. Non-compliance carries severe penalties, including multimillion-dollar fines, to deter asset mismanagement and fraud.

Government officials emphasized that the framework addresses critical gaps in crypto regulation, projecting up to $24 billion in annual productivity gains by streamlining digital asset integration into the economy. James Volpe, founding director of Melbourne-based Web3 education firm uCubed, described the approach as "early stage experimentation without forcing every proof of concept to go through the process of becoming licensed from day one," highlighting the balance between fostering innovation and ensuring consumer protection. The reforms also align with broader global efforts to clarify digital asset frameworks, such as the U.S. GENIUS Act and evolving SEC guidelines.

The bill's introduction follows ASIC's October 2025 update to Information Sheet 225, which clarified that tokens and stablecoins often qualify as financial products under existing laws, reinforcing regulatory expectations for custody, fund management, and yield-generating products. This move reflects Australia's strategic positioning to capitalize on blockchain's economic potential while mitigating risks associated with unregulated crypto operations.

Industry stakeholders have welcomed the framework, though some have called for simpler rules and clearer definitions. The government's statement underscored the importance of blockchain in driving economic growth, stating that the reforms will "strengthen safeguards" for Australians who entrust digital assets to private platforms. As the bill progresses through parliamentary debate, its implementation will likely set a precedent for how other nations address the evolving intersection of crypto and traditional finance.