Australia has passed legislation that regulates digital asset platforms and custodians to hold an Australian Financial Services License (AFSL), putting them on the same footing as regulated financial services firms.
Titled “Corporations Amendment (Digital Assets Framework) Bill 2025,” the legislation was passed by the Senate on Wednesday, meaning it has now been passed by both houses of parliament, after previously passing the House of Representatives in February.
The bill, introduced last November by the Australian government, aims to bring digital asset service operators into the same consumer protection and conduct regime that governs traditional financial services.
“Failures of digital asset intermediaries have caused major losses for consumers, including in Australia,” said the government explainer to the bill. “While some of these intermediaries are already regulated, a gap exists when intermediaries hold large volumes of digital assets that are not financial products.”
According to the government, this gap exists because broad financial product definitions “have created significant uncertainty about the regulatory status of some digital asset products and services,” leading to a lack of clarity that “has left many participants unsure of how to operate under Australian law, limiting the sector’s capacity to innovate and grow.”
In order to correct this, the bill provides new definitions for two types of digital asset companies, both of which must now hold an AFSL to operate: “digital asset platforms,” which are facilities where an operator possesses digital tokens on behalf of clients, whether as trustee, bailee, or under contractual arrangements that require the operator to follow client instructions; and “tokenized custody platform,” which are facilities where an operator identifies an underlying asset (other than money), creates a single digital token representing the right to redeem or direct its delivery, and holds the underlying asset on behalf of the token holder.
Under previous laws, digital asset firms that could fall into these categories were only required to comply with anti-money laundering (AML) and know-your-customer (KYC) regulations. They will now be subject to a host of new obligations that come with being an AFSL-licensed entity.
This includes being required to act “efficiently, honestly and fairly,” such as not engaging in misleading and deceptive conduct, not offering unfair contract terms, informing customers as to the manner in which their assets are held, and having avenues of dispute resolution and compensation.
Beyond bringing the two newly defined categories of digital asset business into existing rules, the bill also contains some compromise to the unique nature of the digital asset sector, with smaller operators—those that hold less than AUD$5,000 (USD$3,441) per customer and facilitate under AUD$10 million (USD$6.8 million) in transactions per year—being exempt.
“Millions of Australians are using or investing in digital assets every year and this is about making that as safe and secure as possible, while also encouraging innovation,” said Treasurer of Australia Dr. Jim Chamber MP and Minister for Financial Services Daniel Mulino MP, in their joint statement announcing the bill back in November 2025.
In terms of motivating factors, they also cited research from the Digital Finance Cooperative Research Centre that indicated Australia could capture as much as AUD$24 billion (USD$16.5 billion) a year in productivity and cost savings “thanks to unlocking digital finance innovation.”
“This legislation will help us realise those benefits while also reducing risks to Australians,” added the pair.
The bill still needs to be given Royal Assent, a largely ceremonial formality, after which digital asset firms will have 12 months to obtain a license and get themselves compliant with the new law before it comes into force.
Watch | Tokenization on public blockchain: Transforming RWAs and finance
Source: https://coingeek.com/australia-mandates-licenses-for-crypto-exchanges-custodians/
