Background and Core Provisions of the Bill
On April 1, 2025, the Australian Parliament passed the Corporations Amendment (Digital Assets Framework) Bill 2025, the country's first comprehensive digital asset regulatory framework. The legislation mandates that cryptocurrency exchanges and digital asset custody providers must hold an Australian Financial Services Licence (AFSL), placing the crypto sector under the same standards that govern brokers and fund managers. Previously, Australia's regulatory landscape for crypto was fragmented—exchanges only needed to register with anti-money laundering authorities unless their products qualified as financial instruments. The new framework marks a significant step forward, aiming to boost market confidence through enhanced oversight. The law targets intermediaries that control customer funds rather than the digital assets themselves, addressing risks such as commingling of assets, misuse of funds, and insolvency that left customers unable to recover holdings.
Two New Licensing Categories and Operator Obligations
The bill introduces two new regulated categories under the Corporations Act. The first is "digital asset platforms," which cover exchanges and similar services that hold crypto on behalf of users. The second is "tokenized custody platforms," applicable 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 (ASIC). This subjects them to strict obligations: safeguarding client assets, maintaining adequate capital, providing clear disclosures, and participating in dispute resolution systems. ASIC also gains expanded powers to set rules on custody, governance, and risk management, with civil penalties for non-compliance. The framework does not directly regulate digital assets themselves but focuses on intermediaries controlling customer funds, learning from past industry failures.
Small Platform Exemptions and Industry Outlook
To preserve space for early-stage innovation, the law includes limited exemptions. Firms holding less than A$5,000 (approximately US$3,300) per customer and processing under A$10 million (approximately US$6.6 million) in annual transactions are not subject to full licensing requirements. This exemption aims to balance regulatory standards with the needs of startups. Meanwhile, Australia's largest pension fund, Hostplus, is exploring offering Bitcoin and other digital assets to its nearly two million members through its Choiceplus platform. A rollout could come as early as the next financial year, pending regulatory approval and final product design. The bill now awaits royal assent and is expected to take effect after a transition period, giving firms time to adjust operations for full compliance. Industry observers believe this law will help Australia capture a larger share of the global digital finance market by providing a clear, investor-friendly regulatory environment.