Australian Senate Committee Backs Crypto Regulation Bill: Exchanges to Apply for Financial License

An Australian Senate committee has endorsed a bill to bring cryptocurrency platforms and custody providers under the country's existing financial services framework. The proposed Corporations Amendment (Digital Assets Framework) Bill 2025 aims to modernize digital-asset oversight with traditional market safeguards to protect consumers. The bill would amend the Corporations Act 2001 and the Australian Securities and Investments Commission Act 2001 to regulate digital token managers.

The framework targets firms that hold digital assets on behalf of customers, bringing them under existing financial services rules rather than attempting to regulate the underlying blockchain infrastructure. If the measure becomes law, firms without an Australian Financial Services Licence (AFSL) would have six months to obtain the required authorization and comply with the new framework. Crypto exchanges in Australia are already required to register with AUSTRAC before offering exchange services.

The legislation requires digital-asset platforms and tokenized custody services to hold an AFSL and follow strict rules to protect customer assets and provide clear information for retail users. Companies without a licence would have six months to meet the requirements. The law also defines key terms like 'digital tokens,' 'digital asset platforms,' and 'tokenized custody platforms' to ensure crypto businesses follow existing financial laws.

Why Did This Happen?

The Senate Economics Legislation Committee has recommended the passage of a major cryptocurrency regulatory bill that would require platforms to obtain financial licenses. The Corporations Amendment (Digital Assets Framework) Bill 2025 is intended to strengthen safeguards for Australian consumers by creating clearer rules for market participants. The bill focuses on intermediaries that hold customer assets or facilitate trading.

The bill represents a 'substantial improvement' to the regulation of digital assets in Australia. The legislation is part of Australia's broader push to establish a comprehensive regulatory framework for crypto services. Under the proposal, businesses operating digital asset platforms or tokenized custody platforms would be treated similarly to other financial service providers and required to obtain an AFSL.

How Did Markets React?

The bill has received broad support from industry players who see the move as a step toward a clearer regulatory framework. However, some have raised concerns that the bill's definitions of 'digital tokens' and 'actual control' are overly broad, potentially affecting infrastructure providers or non-custodial services. The committee acknowledged these concerns but decided to refine the perimeter through future regulations rather than rewriting the core definitions.

If enacted, affected firms will have a six-month transition period to finish their license applications. The bill has passed the House of Representatives and is now under Senate consideration. Most industry players back the government's push for a clearer regulatory framework, though some have called for more precise language to avoid unintended consequences.

What Are Analysts Watching Next?

Analysts are watching how the bill progresses through the Senate and whether any amendments will be proposed in response to industry concerns. The bill's focus on intermediaries rather than the underlying blockchain technology is seen as a technology-neutral approach that aligns with global regulatory frameworks. The framework would also establish standards for safeguarding customer assets.

The Senate committee has recommended the bill be passed, and the measure now moves to the Senate for debate and a final vote at a later date. The bill's potential impact on small providers with annual transaction thresholds under AU$10 million and public blockchain infrastructure remains under scrutiny.

The bill would legally define key terms like 'digital tokens' and set rules for asset custody, trade execution, information disclosure, and customer asset protection. Introduced by the Treasury in November 2025, the bill passed the House of Representatives on February 4, 2026, and is now under Senate consideration.