Australia is preparing to reshape its cryptocurrency landscape with new regulations that would apply bank-grade standards to exchanges and custody providers. The proposal, released on September 25, outlines how digital asset platforms will fall under the Corporations Act, with licensing overseen by the Australian Securities and Investments Commission (ASIC).
Bank-Level Oversight for Crypto Platforms
Assistant Treasurer Daniel Mulino introduced the draft at the Digital Economy Council’s summit, noting the push is aimed at improving custody and consumer protection. Exchanges holding client tokens will need to secure an Australian Financial Services Licence (AFSL)—a requirement already applied to banks and custodians.
Two categories are set to be introduced:
-
Digital asset platforms, covering exchanges that handle custody, trades, staking, and transfers.
-
Tokenised custody platforms, which issue tokens backed by underlying assets like commodities or securities.
Non-custodial services such as self-hosted wallets and decentralized automated market makers will remain outside the scope, while stablecoin issuers will be regulated under separate payments law reforms.
What Platforms Must Deliver
Licensed platforms will have to meet strict operational and disclosure standards, including:
-
Publishing a Platform Guide with custody terms, fees, risks, and reporting rules.
-
Safeguarding assets in compliance with ASIC benchmarks.
-
Following rules on misleading conduct, unfair contracts, and distribution obligations.
Breaches could trigger steep penalties, with civil fines reaching up to A$16.5 million or 10% of annual turnover, capped at 2.5 million penalty units.
Smaller platforms may qualify for exemptions if they manage under A$5,000 per customer or less than A$10 million annually, though these thresholds remain under consultation until October 24.
Global Context
Australia’s approach mirrors global moves but leans on existing law instead of building a new framework.
-
European Union: MiCA regulation phased in during 2024–2026, already shaping exchange offerings.
-
United Kingdom: Incorporating crypto into its Financial Services and Markets Act, with the FCA setting detailed rules.
-
United States: Patchwork approach with stablecoin legislation under the GENIUS Act, but no full federal regime.
-
Asia: Singapore and Hong Kong already regulate stablecoins, while Japan enforces strict exchange licensing.
Market Impact in Australia
Analysts expect the framework to drive industry consolidation, as larger exchanges are better positioned to absorb compliance costs. Recent moves, such as IG Group’s A$178 million purchase of Independent Reserve, suggest that traditional finance players are preparing for the shift.
Stronger governance may also ease tensions with Australian banks, which have restricted payments to some crypto platforms due to scam risks. Licensed operators could gain better access to local banking rails, boosting trust and liquidity.
For investors, the outcome could be mixed—greater protection and clearer complaint processes, but possibly higher fees, fewer token listings, and stricter scrutiny of yield-based products.
With roughly 31% of Australian adults already engaged with crypto in 2025, the government’s move marks a critical turning point. If adopted, the licensing regime could take effect in 2026, reshaping access to digital assets, ETFs, and exchange platforms alike.
