Australia’s New Crypto Framework: $24 Billion Boost and Tighter Custody Standards

The Australian government has introduced comprehensive legislation to regulate the digital asset sector, a move it projects will unlock up to A$24 billion a year in productivity and cost savings.

The Corporations Amendment (Digital Assets Framework) Bill 2025, introduced to Parliament on November 26, 2025, aims to bring the country’s cryptocurrency exchanges and custody providers under the same regulatory umbrella as traditional financial services. This landmark legislation positions Australia as a proactive leader in establishing a clear, comprehensive, and enforceable regulatory environment for digital assets.

Mandatory Licensing and New Regulatory Categories

The core of the new framework is the requirement for most digital asset businesses to obtain an Australian Financial Services License (AFSL). This will place them under the supervision of the Australian Securities and Investments Commission (ASIC), the nation’s corporate, markets, and financial services regulator.

The legislation specifically introduces two new categories of regulated entities: “digital asset platforms” and “tokenised custody platforms”. These new categories reflect the government’s recognition of the distinct functions within the digital asset ecosystem, ensuring that regulatory obligations are tailored to the unique structure and risk profile of each platform type.

The move is a direct response to recent international collapses in the crypto market, which highlighted the risks of businesses holding unlimited client digital assets without adequate financial law safeguards.

The new rules are designed to close these gaps by ensuring that platforms meet the same standards of transparency, integrity, and consumer protection that apply across the financial system. By mandating AFSLs, the government is seeking to boost confidence in the sector, attract responsible investment, and support job creation by providing trusted rules for emerging digital markets.

Stricter Standards for Consumer Protection and Custody

Licensed platforms will be subject to core obligations, including the requirement to act “efficiently, honestly and fairly”. They must also provide customers with clear information about how assets are held and what their rights are, maintain strong governance and risk controls, and offer accessible dispute resolution and compensation if issues arise. These requirements are critical for ensuring that consumer interests are protected in a rapidly evolving technological landscape.

A key focus of the Bill is on crypto custody. Platforms that hold digital assets on behalf of consumers will be required to meet stricter standards for the possession and safeguarding of those assets.

This emphasis on custody and transaction settlement is intended to protect consumers from the risks associated with commingling client funds and poor operational security, a vulnerability exposed by several high-profile failures globally.

The Bill grants ASIC the ability to make standards that deal with the conduct of licensees in relation to possessing and safeguarding digital assets, ensuring a flexible yet robust regulatory response to evolving technology.