Australia Bridges Digital and Traditional Finance with Landmark Crypto Rules

Australia has taken a significant step toward formalizing oversight of its cryptocurrency sector with the introduction of the Corporations Amendment (Digital Assets Framework) Bill 2025, a legislative move that mandates crypto exchanges and custody providers to obtain an Australian Financial Services Licence (AFSL) and operate under the supervision of the Australian Securities and Investments Commission (ASIC). The bill, introduced by Treasurer Jim Chalmers and Financial Services Minister Daniel Mulino, establishes the country's first comprehensive regulatory framework for businesses holding digital assets on behalf of customers. This overhaul aims to align the crypto industry with traditional financial services standards while addressing risks highlighted by past failures, such as the FTX collapse.

The legislation introduces two new license categories-"digital asset platform" and "tokenized custody platform"-to reflect the distinct roles of firms in managing customer assets according to the bill's provisions. Digital asset platforms, which facilitate trading and custody of crypto assets like Bitcoin and stablecoins, will need to adhere to ASIC's custody and settlement standards. Tokenized custody platforms, meanwhile, will handle tokenized representations of real-world assets such as bonds, property, and commodities, requiring operators to hold the underlying assets and issue redeemable tokens according to the new framework. Assistant Treasurer Daniel Mulino emphasized that the reforms focus on "the companies that control customer assets rather than the underlying technology," ensuring comparable obligations for similar activities across the financial ecosystem.

The bill also imposes strict penalties for non-compliance, with multimillion-dollar fines for firms failing to safeguard client assets or adhere to ASIC's standards. These measures aim to close regulatory gaps that previously allowed unregistered platforms to operate without financial law safeguards according to industry analysis. Small operators, however, will face lighter requirements: platforms with under $5,000 per customer and less than $10 million in annual transaction volume will be exempt from full licensing, fostering innovation while maintaining consumer protections. James Volpe, director of Web3 education firm uCubed, described this as a "sandbox" for experimentation, allowing proof-of-concept projects to develop without the upfront costs of full compliance.

The government projects that the new framework could unlock up to $24 billion in annual productivity gains by attracting institutional investment and fostering trust in digital finance. This economic rationale underscores the bill's dual focus on risk mitigation and innovation. By aligning digital assets with existing property, tax, and consumer laws, the legislation seeks to integrate crypto into Australia's financial infrastructure while ensuring transparency and accountability.

Industry stakeholders have generally welcomed the move, though some called for clearer definitions and simpler rules during the consultation phase. Mulino acknowledged these concerns, framing the bill as the "cornerstone" of the Albanese Government's crypto roadmap and a critical step toward positioning Australia as a leader in digital finance. The bill's rapid progression to a second reading in Parliament signals its priority status, with detailed debates expected to follow.

Globally, Australia's approach mirrors regulatory trends in markets like the EU and Singapore, where frameworks for digital assets are being formalized to balance innovation with consumer protection according to market analysts. As the bill moves toward enactment, its success will hinge on its ability to adapt to emerging technologies while maintaining a level playing field for crypto businesses.