Australia Moves Closer to Major Crypto Regulation Overhaul After Senate Support

Key Highlights

• Australia’s Senate Economics Legislation Committee has backed the Digital Assets Framework Bill 2025
• The proposed legislation would introduce licensing requirements for crypto exchanges and custody platforms
• Digital asset providers would be regulated under Australia’s existing financial services framework
• Regulators say the approach focuses on economic function rather than blockchain technology itself
• Industry groups support clearer regulation but warn some definitions may be overly broad
• The framework is designed to improve consumer protection following major crypto industry collapses
• If passed, Australia could establish one of the most comprehensive crypto regulatory systems in the Asia-Pacific region

Australia has taken a major step toward implementing a comprehensive regulatory framework for digital assets after the Senate Economics Legislation Committee recommended advancing the Corporations Amendment (Digital Assets Framework) Bill 2025. The proposal represents one of the country’s most significant crypto policy developments to date and could dramatically reshape how digital asset businesses operate within Australia.

The legislation would require centralized crypto exchanges and tokenized custody platforms to operate under Australia’s existing financial services regime. Under the proposed framework, many digital asset platforms would need to obtain an Australian Financial Services Licence (AFSL) and comply with operational standards covering custody, governance, disclosure obligations, and customer protections.

Lawmakers say the bill is intended to close regulatory gaps that became increasingly visible following the collapse of several major crypto firms, including the failure of FTX. Policymakers argue that bringing crypto businesses under established financial oversight could improve transparency and reduce systemic risks for retail investors.

A central feature of the proposal is its “function over technology” philosophy. Australian regulators, including the Australian Securities and Investments Commission (ASIC), have argued that firms performing financial activities such as custody, settlement, and trading should face similar rules regardless of whether those services are delivered through blockchain networks or traditional financial infrastructure.

The bill also includes exemptions for smaller operators. Platforms processing less than A$10 million in annual transaction volume would reportedly face lighter regulatory obligations, while certain blockchain infrastructure providers may remain outside the licensing perimeter entirely. Lawmakers say the goal is to balance consumer protection with continued innovation in the country’s growing digital asset sector.

Despite broad support for clearer regulation, some industry participants have raised concerns about the wording of key definitions within the legislation. Legal experts and crypto firms warn that broad interpretations of terms such as “digital token” and “factual control” could unintentionally classify wallet software developers or multi-party computation infrastructure providers as regulated custodians.

Companies including Ripple Labs reportedly argued that the bill should clarify that a platform only exercises factual control when it can independently move customer assets without direct user approval. Without such clarification, critics fear some non-custodial technology providers could fall under unnecessary compliance burdens.

The Senate committee acknowledged those concerns but ultimately supported moving the legislation forward, suggesting more detailed refinements could be addressed later through secondary regulations and implementation guidance. The bill will now proceed to a full Senate debate and vote.

If enacted, the framework could position Australia as one of the leading jurisdictions globally for structured crypto oversight. Analysts say the country’s platform-based regulatory approach differs from newer US proposals such as the CLARITY Act, which focuses more heavily on classifying digital assets themselves rather than primarily regulating the businesses operating around them.

The proposal has also generated discussion across online crypto communities, with some users praising Australia for moving faster than larger economies on regulatory clarity, while others argue the legislation simply extends traditional financial oversight into the digital asset industry rather than fundamentally embracing cryptocurrency innovation.

For now, the crypto industry is closely watching the next phase of the bill’s progress, as Australia’s approach could influence how other Asia-Pacific nations structure future digital asset regulation in the years ahead.