Skip to content
- Australia mandates crypto licensing to tighten oversight and protect investors.
- New law forces digital asset platforms to meet strict rules and obtain AFSL.
- Tokenization gains pace as reforms aim to boost efficiency and reduce risk.
Australia has passed a major law that will oversee the crypto sector and safeguard investors around the country. The legislation demands that digital asset platforms acquire licenses and abide by strict regulations, indicating a move towards stricter financial regulations.
The legislation has been named “Corporations Amendment (Digital Assets Framework) Bill 2025.” It has now passed both chambers of Parliament. The Treasury introduced this legislation in November 2025. The legislation will ensure crypto firms align with traditional financial services.
Licensing Rules Set Standards for Crypto Platforms
Platforms will be required to have an Australian financial services license. The legislation will apply to firms that offer digital assets or custody services. The framework will ensure crypto firms align with traditional financial services.
The legislation has outlined conduct standards for crypto firms. Crypto firms will be required to conduct themselves in a fair and honest manner.
While they will be required to have strong governance arrangements in place. The legislation has now made risk management a core component.
However, crypto firms will be required to disclose how they manage customer funds. The firms will be required to disclose how they handle customer assets. The aim is to ensure users know where their funds are being stored. However, the aim is to ensure greater trust and transparency.
The law avoids a strict definition of digital assets. However, official guidance places them under existing legal frameworks. These include property law, consumer protection, insolvency rules, and taxation. This approach allows flexibility while ensuring coverage.
Also Read: Bhutan Moves $25M in Bitcoin—Is a Massive Sell-Off Already Underway?
The law will take effect 12 months after Royal Assent. A transition period will follow for existing businesses. Moreover, this gives firms time to meet licensing requirements. While, regulators expect gradual compliance across the sector.
However, recent enforcement cases show why reform was needed. The Australian Securities and Investments Commission took action against Binance’s derivatives unit. The Federal Court found serious compliance failures. These failures exposed retail investors to high risks.
Misclassification Spurs Tokenization Push
More than 85% of local users were misclassified as wholesale clients. This allowed them to access complex derivative products. A total of 524 investors were harmed between July 2022 and April 2023. The court imposed a fine of A$10 million.
The new law also supports growth in tokenized finance. The Reserve Bank of Australia sees a clear role for tokenized assets. Officials now focus on how to implement such systems. This signals confidence in future adoption.
According to Project Acacia, findings show clear benefits for wholesale markets. While, tokenization can improve efficiency and lower systemic risk. The project’s research also shows that the process has great potential economically. There is also the potential to create value through better infrastructure.
A study estimates gains of up to $24 billion each year. However, slower progress could limit this outcome. Current projections suggest only A$1 billion by 2030. The new law aims to close that gap and support growth.
Also Read: Tether’s Bullion Strategy Faces Setback as Key Traders Exit Early
