Australia’s financial regulator is drawing a hard line on how the crypto industry should be governed — and it has little patience for firms trying to use technological jargon to sidestep existing rules.
Key Takeaways
- ASIC’s fintech head argues crypto should be regulated by economic function, not technology labels
- Australia’s Digital Assets Framework Bill 2025 mandates new licensing for crypto platforms, with a deadline of June 30, 2026
- New framework could unlock A$24 billion in annual productivity gains, but breaches carry penalties of up to 10% of annual turnover
- Industry leaders are pushing back on broad regulatory powers and calling for clearer definitions
Speaking at the Melbourne Money & Finance Conference on March 11, 2026, Rhys Bollen, head of fintech at the Australian Securities and Investments Commission (ASIC), made the case that crypto-assets ought to be classified and regulated according to their economic substance rather than the technology underpinning them. In his framing, blockchain and crypto are little more than “new plumbing” – infrastructure carrying out financial functions that have existed for decades, including capital allocation, payments, and risk management.
The remarks signal a deliberate shift in how ASIC intends to approach an industry that has, for years, argued its novelty warrants a regulatory framework built from scratch.
Fitting Old Wine Into New Bottles
Bollen’s position is straightforward: if a tokenized product walks like a security and talks like a security, it should be regulated as one. Under his proposed functional classification model, tokenized securities would fall under existing securities legislation, while stablecoins would be governed by payment services law.
The regulator’s crosshairs are trained not on the tokens themselves, but on the intermediaries – custody providers, trading platforms, and lending services – that sit between consumers and the underlying assets. According to ASIC, these platforms are the primary source of consumer harm, making them the logical point of regulatory intervention.
Critically, ASIC is also pushing back against decentralization as a regulatory shield. The commission’s position holds that regulatory obligations apply whenever identifiable parties influence a protocol’s design or economic outcomes – regardless of how decentralized a project claims to be.
Legislation in Motion
The regulatory posture comes as Australia moves closer to finalizing its Digital Assets Framework Bill 2025, which is expected to clear parliament in 2026. The bill introduces Australian Financial Services Licence requirements for Digital Asset Platforms and Tokenised Custody Platforms, bringing them in line with obligations already applied to traditional financial services firms.
To ease the transition, ASIC has extended a sector-wide “no-action” position until June 30, 2026, for firms actively working toward appropriate licensing. A separate class relief measure, introduced in December 2025, covers intermediaries distributing certain stablecoins and wrapped tokens.
The compliance burden extends beyond ASIC’s remit. From March 31, 2026, digital asset businesses are required to register with Australia’s financial intelligence agency, AUSTRAC, and establish formal anti-money laundering programs – a significant operational lift for smaller operators.
The Numbers Behind the Push
The Australian government has projected that a well-designed digital asset framework could generate A$24 billion in annual productivity gains – a figure regulators and politicians have leaned on heavily to justify the legislative push. But the framework carries teeth. Companies that breach the rules face penalties of up to 10% of annual turnover, a figure that could prove crippling for mid-sized firms.
Smaller operators have been granted some breathing room. Platforms holding less than A$5,000 per customer and processing under A$10 million in annual transactions are exempt from the new licensing requirements entirely.
Industry Pushback
Not everyone is on board with ASIC’s approach. Bollen has previously courted controversy – most notably for comparing Bitcoin to cigarettes used as prison currency to illustrate how non-cash assets can serve as payment facilities. The analogy drew swift criticism from industry figures who viewed it as dismissive of the sector’s legitimacy.
More substantively, Swyftx CEO Jason Titman has publicly flagged concerns about overly broad regulatory powers written into the legislation, calling for tighter, more precise definitions rather than open-ended mandates that could give regulators expansive discretion.
One area where industry and regulator appear aligned, however, is de-banking. Crypto firms have long struggled to maintain banking relationships, with financial institutions frequently cutting ties citing regulatory uncertainty. By granting qualifying firms a clear legal status through an AFSL, the new framework could remove one of the main justifications banks have used to shut crypto companies out – a practical benefit that has earned the legislation cautious support from parts of the industry.
Whether ASIC’s substance-over-form doctrine proves workable in practice remains to be seen. The June 2026 licensing deadline is approaching fast, and how regulators handle the first wave of applications will set the tone for an industry watching closely.
The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.
Alex is an experienced financial journalist and cryptocurrency enthusiast. With over 8 years of experience covering the crypto, blockchain, and fintech industries, he is well-versed in the complex and ever-evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His approach allows him to break down complex ideas into accessible and in-depth content. Follow his publications to stay up to date with the most important trends and topics.
Source: https://coindoo.com/australias-financial-regulator-moves-to-bring-crypto-under-existing-laws/