Crypto licensing australia: 2025 overhaul tightens rules

Australia is moving to overhaul oversight of digital assets, with crypto licensing australia now central to the country’s mainstream financial regulation plans.

What does Australia’s new digital assets framework propose?

The Australian government has unveiled new legislation that would require financial licences for crypto platforms, sharply tightening oversight of the rapidly growing sector. The Treasury submitted the Corporations Amendment (Digital Assets Framework) Bill 2025 to parliament on Wednesday, following the circulation of a draft bill during its September consultation.

The bill was introduced and read a first time yesterday, and has now been moved for second reading. Moreover, the new legislation seeks to bring crypto service providers under the existing financial services licensing regime, rather than building a fully separate structure.

Specifically, the bill would mandate that digital asset platforms and tokenized custody platforms hold an Australian Financial Services Licence (AFSL). Under the proposal, these businesses would operate under the same licensing umbrella as traditional financial services providers.

How will digital assets be treated under Australian law?

According to an explanatory memo published alongside the bill, digital assets would fall under the same general legal frameworks as other assets. That means they will be subject to property, consumer, insolvency, criminal, family and tax laws in Australia, aligning them more closely with the treatment of conventional investments.

The Treasury also noted in a Wednesday statement that the bill aims to bring crypto service operators into the same consumer protection and conduct regime that governs traditional financial services. However, this alignment is being designed to accommodate the specific technical and business models used by crypto platforms.

“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,” Assistant Treasurer Daniel Mulino said in the statement. That said, the government insists that stronger rules should not stifle industry growth.

What new obligations will licensed crypto platforms face?

Under the new bill, licensed platforms would be required to act “efficiently, honestly and fairly” and provide clear disclosures on how customer assets are stored. Moreover, they must maintain robust governance and risk controls, avoid misleading conduct, and offer dispute-resolution and compensation mechanisms to users.

However, the AFSL obligations would be tailored to reflect the unique structures of crypto businesses. This is where the new crypto licensing australia approach becomes more nuanced, as it recognises that not all digital asset platforms carry the same level of systemic risk.

Smaller operators — those holding less than A$5,000 per customer and facilitating under A$10 million in annual transactions per year — would be exempt from the full requirements. This carve-out mirrors existing exemptions for other low-risk financial products, such as non-cash payment facilities, and is framed as a way to preserve low risk crypto exemptions while still protecting consumers.

How does this differ from Australia’s current crypto rules?

Under current law, crypto exchanges in Australia are only required to comply with anti-money laundering and know-your-customer regulations. As a result, they face far lighter obligations than fully licensed financial services firms, particularly around disclosure, governance and customer remediation.

The proposed framework would apply across both crypto assets such as bitcoin and stablecoins, and tokenized representations of real-world assets including bonds, property and commodities. Moreover, the government views broader real world assets tokenization as a strategic opportunity for the domestic financial system.

Such tokenization and digital finance could unlock up to A$24 billion in annual productivity and cost savings, the Treasury said, citing new research from the Digital Finance Cooperative Research Centre. That said, achieving those gains will depend on building trust and legal certainty for institutional participants.

How does the bill build on ASIC’s earlier work?

The legislation builds on earlier efforts by the Australian Securities and Investments Commission (ASIC), which last month clarified how tokenized financial products fit within existing law. In that guidance, ASIC also signalled stricter enforcement for unlicensed crypto business models, setting the stage for this statutory overhaul.

Earlier this month, ASIC Chair Joe Longo said that the country must “seize the opportunity or be left behind” as tokenization transforms capital markets worldwide. However, he also emphasised that regulatory clarity is essential if Australia is to compete as a digital finance hub.

In summary, the Corporations Amendment (Digital Assets Framework) Bill 2025 marks a decisive shift in how Australia approaches digital asset regulation. It blends traditional financial licensing standards with crypto-specific adjustments, seeking to boost innovation while embedding stronger consumer protections across exchanges, custody platforms and tokenized asset markets.