Australia backs licensing framework for crypto platforms

TLDR

Australia is moving toward a formal licensing regime for crypto platforms, but the new rules are not law yet.

1. A Senate committee has endorsed the Corporations Amendment (Digital Assets Framework) Bill 2025, backing AFSL style licensing for crypto platforms and custodians.
2. Exchanges and tokenized custody platforms holding client assets would face traditional finance style rules on licensing, custody, governance, and disclosures, with small operator exemptions.
3. The framework could boost user protection and regulatory clarity but raises open questions for wallet and infrastructure providers and still needs full parliamentary approval.

Deep Dive

1. What Australia Has Just Backed

Australias Senate Economics Legislation Committee has recommended passing the Corporations Amendment (Digital Assets Framework) Bill 2025, which would plug crypto platforms into the existing financial services regime rather than create a separate crypto law. Reports from outlets like CoinDesk and Decrypt say the bill would amend the Corporations Act 2001 and ASIC Act to create a licensing and compliance system for digital asset platforms and tokenised custody platforms that hold client tokens under an Australian Financial Services Licence (AFSL) framework.

The committees report frames this as modernization of digital asset oversight and a response to collapses like FTX that exposed gaps in how platforms holding customer assets are supervised.

2. What Changes For Platforms And Users

Under the framework, centralized exchanges and tokenization or custody platforms that hold customer assets in Australia would generally need to:

1. Obtain an AFSL and operate under ASICs financial services rules.
2. Comply with custody and settlement standards, including asset safeguarding and segregation.
3. Meet disclosure, conduct, and governance requirements, especially for retail clients.

Coverage focuses on intermediaries that actually control client assets, not the underlying blockchain networks. Some small providers with annual transaction volumes below roughly 10 million Australian dollars would be exempt according to several summaries. A six month transition period is expected for firms that do not already hold an AFSL once the rules take effect.

3. Open Issues, Risks, And Global Context

Industry groups and legal commentators have warned that broad terms like digital token and tests based on factual control could unintentionally capture wallet software or infrastructure providers that do not truly control client funds, especially in multi party computation wallet setups. The committee acknowledged these concerns and signaled that the perimeter would be fine tuned in later regulations rather than rewriting the primary bill.

The bill now proceeds to full Senate debate and further parliamentary stages before it can become law, so details and timing can still change. If implemented, the regime would sit on top of existing AUSTRAC registration duties for anti money laundering, and would put Australia closer to jurisdictions with comprehensive frameworks, such as the EUs MiCA.

Conclusion

Australia is on track to treat major crypto platforms much more like traditional financial institutions, with AFSL licensing, custody standards, and stronger retail disclosures. For crypto users, that points to better asset protection over time, while for platforms it means a real compliance build that could favor well capitalized players and force clearer choices for any service that touches Australian customers.