Australia’s Crypto Plans Take Shape With Landmark Licensing Law

Australia has taken a decisive step toward regulating the digital asset industry, unveiling its first all-encompassing legal framework aimed at bringing crypto businesses under the same umbrella as traditional financial institutions.

The newly passed Corporations Amendment (Digital Assets Framework) Bill 2025 cleared Parliament on April 1, signaling a major shift in how the country approaches crypto oversight. Instead of treating the sector as a separate frontier, lawmakers have chosen to integrate it directly into existing financial rules.

At the core of the reform is a requirement for crypto exchanges and custody providers to obtain an Australian Financial Services Licence (AFSL). This places them alongside brokers and asset managers, forcing compliance with established standards around transparency, capital reserves, and client protection.

The legislation introduces two key categories. Digital asset platforms include exchanges and services that hold crypto on behalf of users, while tokenized custody platforms cover firms managing real-world assets that are represented digitally on-chain. Both groups must now meet strict licensing requirements enforced by the Australian Securities and Investments Commission.

Rather than targeting cryptocurrencies themselves, the framework focuses on intermediaries that control customer funds. This approach reflects lessons learned from past industry collapses, where poor asset segregation, misuse of funds, and insolvencies left investors exposed.

The new rules demand stronger safeguards, including proper custody of client assets, clearer disclosures, and participation in dispute resolution systems. Regulators are also gaining broader authority to define standards around governance, risk management, and operational conduct, with penalties in place for violations.

Despite the tougher stance, the framework leaves breathing room for smaller players. Companies handling less than A$5,000 per customer and under A$10 million in yearly transactions are exempt from full licensing requirements, a move designed to encourage early-stage innovation without heavy compliance burdens.

Meanwhile, institutional adoption may be on the horizon. Australia’s Hostplus pension fund is exploring the possibility of offering Bitcoin and other digital assets to its nearly two million members through its Choiceplus platform, with a potential rollout as early as the next financial year pending approvals.

The overhaul replaces a previously fragmented system where many crypto firms only needed anti-money laundering registration unless their offerings qualified as financial products. Now, a unified regime aims to raise standards across the board.

With the bill awaiting royal assent, a transition period is expected to give companies time to adapt. Once implemented, the framework could position Australia as a more competitive and secure hub in the global digital finance landscape.