Australia is moving closer to introducing a comprehensive regulatory framework for the cryptocurrency industry after the country’s Senate Economics Legislation Committee recommended passing the Corporations Amendment (Digital Assets Framework) Bill 2025.

Key Takeaways

• Australia’s Senate Economics Legislation Committee recommended passing the Digital Assets Framework Bill 2025.

• The bill would introduce licensing requirements for crypto exchanges and tokenized custody platforms.

• Platforms holding customer assets would be regulated under Australia’s existing financial services licensing regime.

The legislation would require crypto exchanges and tokenization platforms operating in the country to comply with existing financial services laws, marking a significant shift in how digital assets are regulated.

The proposal is designed to bring crypto platforms into the same regulatory perimeter as traditional financial institutions. By doing so, policymakers aim to address oversight gaps that became evident following the collapse of major crypto firms such as FTX and several centralized exchanges that held customer assets without sufficient safeguards.

ASIC regulators say crypto should be regulated based on economic function rather than technological labels.

Industry groups warn that the bill’s definitions could unintentionally capture infrastructure providers such as wallet software and MPC systems.

New Licensing Framework for Digital Asset Platforms

The legislation, introduced in November 2025 by Assistant Treasurer and Financial Services Minister Daniel Mulino, seeks to establish a dedicated regulatory structure for what it calls digital asset platforms (DAPs) and tokenised custody platforms (TCPs).

Under the proposal, these platforms would be treated as financial products under the Corporations Act and the Australian Securities and Investments Commission (ASIC) Act. As a result, most centralized crypto exchanges and custody providers that hold customer assets would need to obtain an Australian Financial Services Licence (AFSL).

Licensed platforms would be required to comply with a range of operational standards, including custody safeguards, settlement procedures and governance requirements determined by the Australian Securities and Investments Commission.

They would also need to adhere to tailored disclosure rules when dealing with retail investors, ensuring customers have clearer information about risks, asset custody and platform operations.

However, the bill includes exemptions for smaller service providers. Platforms with annual transaction volumes below 10 million Australian dollars (approximately $7 million), as well as certain public blockchain infrastructure providers, would not be subject to the same licensing requirements.

Lawmakers say the goal is to strike a balance between protecting consumers and ensuring innovation within the country’s growing digital asset sector.

ASIC Pushes “Function Over Technology” Approach

Regulators are also signaling a broader shift in how the crypto sector will be supervised. Speaking at the Melbourne Money & Finance Conference in March 2026, Rhys Bollen, head of fintech at ASIC, argued that digital assets should be regulated based on their economic purpose rather than the technology used to create them.

In his remarks, Bollen described blockchain technology as essentially “new plumbing” – infrastructure that performs financial activities that have existed for decades, including payments, capital allocation and risk management.

The comments reflect ASIC’s view that crypto firms should not receive special treatment simply because they rely on blockchain technology.

Instead, regulators believe companies performing financial services—such as custody, trading or settlement—should fall under existing financial rules regardless of whether they operate through traditional banking infrastructure or decentralized networks.

This approach represents a departure from earlier arguments within the crypto industry that digital assets require an entirely new regulatory framework.

Industry Groups Raise Concerns Over Broad Definitions

While the Senate committee supported the bill, several industry participants warned that the current wording could create unintended consequences.

Legal experts and technology firms have expressed concern about the bill’s broad definitions of “digital tokens” and “factual control.”

Law firm Piper Alderman, cited in the committee report, warned that these definitions could inadvertently classify infrastructure providers—including wallet software developers – as regulated custodians.

The issue is particularly relevant for modern security architectures such as multi-party computation (MPC) wallets. These systems distribute cryptographic keys across multiple entities to enhance security, meaning no single party has unilateral control over an asset.

Blockchain firm Ripple Labs argued that the bill should clarify that an entity only exercises factual control if it can move digital assets independently without the customer’s approval.

Without that clarification, technology providers holding only a portion of a key could theoretically fall within the regulatory perimeter.

The committee acknowledged these concerns but ultimately sided with Treasury’s position that detailed definitions should be refined through future regulations rather than altering the core structure of the bill.

What Happens Next

With the Senate committee’s endorsement, the Digital Assets Framework Bill will now proceed to a full Senate debate and final vote.

If passed, the legislation would establish one of the most comprehensive crypto regulatory regimes in the Asia-Pacific region.

The framework is expected to require digital asset platforms to obtain licenses and comply with regulatory standards by June 30, 2026.

Supporters argue the new rules could unlock substantial economic potential. Estimates suggest the framework could generate up to A$24 billion in annual productivity gains by enabling wider adoption of digital assets and tokenized financial infrastructure.

However, the law also includes strict penalties for violations, with fines potentially reaching 10% of a company’s annual turnover.

As Australia moves closer to implementing the new framework, the outcome will likely influence how other countries in the region approach crypto regulation in the years ahead.