Australia Advances Crypto Exchange Licensing Bill to Strengthen Digital Asset Regulation

• Australia’s Senate committee recommends passing a bill to regulate crypto exchanges and custody platforms.
• Platforms would need an Australian Financial Services Licence under the new framework.
• Industry players warn some definitions may unintentionally classify infrastructure providers as custodians.

Australia is moving closer to implementing a comprehensive regulatory framework for the cryptocurrency sector after lawmakers backed new legislation aimed at licensing digital asset platforms.

The proposed law would bring crypto exchanges and tokenized custody services under the country’s existing financial services regulations, marking a major step toward strengthening oversight of the industry.

Senate Committee Supports Digital Assets Framework

The Senate Economics Legislation Committee has recommended the passage of the Corporations Amendment (Digital Assets Framework) Bill 2025, a proposal designed to close regulatory gaps in the cryptocurrency market.

The bill was first introduced in November 2025 by Daniel Mulino, who serves as Assistant Treasurer and Minister for Financial Services in Australia.

Lawmakers advanced the proposal on March 16, pushing the framework toward a final Senate debate and vote.

Crypto Platforms Would Require Financial Services Licenses

If passed, the legislation would classify Digital Asset Platforms (DAPs) and Tokenized Custody Platforms (TCPs) as financial products under existing laws such as the Corporations Act.

This means most centralized crypto exchanges and custody providers that hold client assets would be required to obtain an Australian Financial Services Licence (AFSL) issued by Australian Securities and Investments Commission.

Licensed platforms would need to meet strict requirements, including:

• Compliance with custody and settlement standards set by regulators
• Disclosure obligations for retail clients
• Governance and operational rules tailored for digital asset platforms

However, the bill includes exemptions for smaller providers. Platforms processing less than AU$10 million (about $7 million) in annual transaction volume would not fall under the licensing requirement, along with certain public blockchain infrastructure providers.

Industry Raises Concerns Over Definitions

Despite broad support for clearer regulation, some industry participants have expressed concerns about specific definitions within the legislation.

Ripple Labs supported the bill’s use of a “control” threshold to determine when a firm should be regulated as a custodian.

However, the company warned that the current definition of “factual control” could incorrectly classify technology providers involved in multi party computation (MPC) systems as custodians—even when they do not have unilateral access to client assets.

Ripple suggested lawmakers clarify that factual control should only apply when an entity can transfer assets without the client’s cooperation.

Legal experts echoed similar concerns.

Piper Alderman noted that broad definitions of “digital token” and control could unintentionally include wallet software providers and blockchain infrastructure services that do not directly manage customer funds.

The Senate committee acknowledged these issues but decided to leave the core definitions unchanged for now, suggesting that adjustments could be made through future regulations.

Industry Welcomes Progress Toward Clear Rules

Despite the concerns, many industry leaders have welcomed the committee’s recommendation as a positive step for Australia’s digital asset sector.

Coinbase Australia director and APAC managing director John O'Loghlen described the move as “an important step for Australia’s standing in the global digital economy.”

He noted that Australia already has the capital, talent, and technological expertise needed to become a global leader in digital asset but emphasized that clearer regulatory frameworks are essential to unlock that potential.

O'Loghlen also highlighted the ongoing issue of debanking, where financial institutions restrict services to crypto companies. He urged the government to implement recommendations from the Council of Financial Regulators to address the practice.

What Happens Next

With the committee’s approval secured, the bill will now move to the Australian Senate for debate and a final vote.

If passed, the legislation could significantly reshape the country’s crypto industry by introducing formal licensing requirements and clearer regulatory standards for digital asset platforms.

The outcome may also influence how other jurisdictions approach crypto regulation as governments worldwide continue developing frameworks for the rapidly evolving digital asset economy.