Australia’s Senate Economics Legislation Committee has endorsed the Corporations Amendment (Digital Assets Framework) Bill 2025 on March 16, recommending parliamentary passage of legislation that would require cryptocurrency exchanges and custodial platforms to obtain an Australian Financial Services Licence (AFSL).
The bill, which passed the House of Representatives on February 4, would impose strict licensing requirements on intermediaries handling customer assets while including exemptions for platforms managing less than AUD 5,000 per customer.
The framework aims to balance investor protection with industry innovation and align Australia with international regulatory standards adopted by the EU and Singapore.
Senate Committee Backs Balanced Approach to Crypto Oversight
On March 16, the Senate Economics Legislation Committee released its report recommending the passage of the Australia crypto regulation bill, formally known as the Corporations Amendment (Digital Assets Framework) Bill 2025.
The committee acknowledged the complexity of regulating crypto markets, noting that policymakers must strike a balance between mitigating financial risks and fostering technological innovation. According to the report, the Australia crypto regulation bill achieves a “workable balance” between protecting investors and allowing the sector to grow.
“This framework reflects a pragmatic approach to oversight in a rapidly evolving sector,” the committee stated, emphasizing that rigid rules could stifle innovation if not carefully designed.
The endorsement adds momentum to the Australia crypto regulation bill, which has already passed key in the House of Representatives and is now undergoing further scrutiny in the Senate. Lawmakers have stressed that aligning with international standards is critical, particularly as jurisdictions such as the EU and Singapore tighten their own crypto regulations.
Licensing Requirements to Reshape Crypto Platforms
At the core of the Australia crypto regulation bill is a requirement that many crypto platforms obtain an Australian Financial Services Licence (AFSL). This move would bring digital asset intermediaries under the same regulatory umbrella as traditional financial service providers.
Rather than targeting blockchain technology itself, the Australia crypto regulation bill focuses squarely on intermediaries—companies that hold or manage customer funds. This includes centralized exchanges and custodial wallet providers, which would be required to meet strict operational and compliance standards.
Under the proposed framework, licensed platforms must implement safeguards to protect client assets, provide transparent fee structures, and disclose operational risks clearly. These measures are designed to address long-standing concerns about platform failures and mismanagement in the crypto sector.
“The emphasis is on conduct, not code,” said a Treasury official familiar with the proposal. “The Australia crypto regulation bill is about ensuring that businesses handling customer assets meet the same expectations as other financial institutions.”
The legislation also introduces formal definitions for key industry terms, including “digital tokens,” offering much-needed legal clarity. Analysts say this could reduce uncertainty for businesses and investors alike, making Australia a more attractive destination for crypto firms.
Targeting Risk While Supporting Innovation
A notable feature of the Australia crypto regulation bill is its risk-based approach. By focusing on custodial risk and intermediary behavior, lawmakers aim to prevent issues such as asset misappropriation, operational failures, and inadequate disclosures.
The bill also includes exemptions for smaller operators. Platforms managing less than AUD 5,000 per customer and processing under AUD 10 million annually may qualify for lighter regulatory requirements. This provision ensures that startups and smaller firms are not disproportionately burdened.
Industry voices have cautiously welcomed the Australia crypto regulation bill, with some praising its attempt to balance oversight with flexibility.
“Clear rules are essential for long-term growth,” said Michael Bacina, a partner at Piper Alderman and a recognized blockchain legal expert. “If implemented well, the Australia crypto regulation bill could position Australia as a leader in responsible crypto regulation.”
However, some stakeholders remain concerned about compliance costs and the potential impact on innovation. Critics argue that overly stringent licensing requirements could push smaller players out of the market.
Part of a Broader Regulatory Strategy
The Australia crypto regulation bill builds on existing regulatory measures, particularly those enforced by the Australian Transaction Reports and Analysis Centre. Currently, crypto exchanges must register with AUSTRAC and comply with anti-money laundering (AML) and counter-terrorism financing (CTF) obligations.
The new legislation expands this framework significantly. While AUSTRAC focuses on financial crime prevention, the Australia crypto regulation bill introduces a broader licensing and conduct regime, covering operational integrity and consumer protection.
Originally introduced by the Treasury in November 2025, the Australia crypto regulation bill passed its third reading in the House of Representatives on February 4 before being referred to the Senate for further consideration.
If enacted, the bill would mark one of the most comprehensive crypto regulatory frameworks in the Asia-Pacific region. Policymakers believe it will enhance trust in digital asset markets while ensuring that Australia remains aligned with global regulatory trends.
As the Australia crypto regulation bill moves closer to becoming law, its impact is expected to ripple across the industry—reshaping how platforms operate, how investors engage with crypto, and how Australia positions itself in the global digital economy.
