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Australia has approved its first comprehensive digital asset framework, requiring crypto exchanges and custody providers to obtain financial services licenses, bringing the sector under the country’s core financial regulations.

The Corporations Amendment (Digital Assets Framework) Bill 2025 cleared both houses of Parliament on April 1, marking a major shift in how digital assets are regulated. 

The legislation integrates crypto platforms into the existing Australian Financial Services Licence (AFSL) regime, placing them under the same standards that govern brokers and fund managers.

The law introduces two new regulated categories under the Corporations Act. Digital asset platforms cover exchanges and similar services that hold crypto on behalf of users. Tokenized custody platforms apply to firms that hold real-world assets and issue digital tokens representing those holdings.

Operators in both categories must obtain an AFSL from the Australian Securities and Investments Commission. This subjects them to obligations including safeguarding client assets, maintaining adequate capital, providing clear disclosures, and participating in dispute resolution systems.

Rather than regulating digital assets themselves, the framework targets intermediaries that control customer funds. Policymakers designed the approach to address risks exposed by past industry failures, including commingling of assets, misuse of funds, and insolvency events that left customers unable to recover holdings.

Australia’s Hostplus pension fund is also exploring offering Bitcoin and other digital assets to its nearly two million members through its Choiceplus platform. A rollout could come as early as next financial year, pending regulatory approval and final product design.

Crypto platforms face stricter standards

The reforms replace a fragmented system where crypto exchanges only needed to register with anti-money laundering authorities unless their products qualified as financial instruments. Under the new regime, platforms must meet stricter operational and financial standards aligned with existing financial services laws.

The legislation also grants expanded powers to the regulator to set rules on custody, governance, and risk management, with civil penalties for noncompliance. At the same time, smaller platforms receive limited exemptions.

Firms holding less than A$5,000 per customer and processing under A$10 million in annual transactions are not subject to full licensing requirements, preserving room for early-stage innovation.

The law positions Australia to capture a larger share of the digital finance market. The bill now awaits royal assent and is expected to take effect after a transition period, giving firms time to comply with the new licensing regime.

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