Briefing
The Australian Treasury has released a draft bill to expand its financial services regulatory regime, explicitly bringing Digital Asset Platforms (DAPs) and Tokenised Custody Platforms (TCPs) under comprehensive oversight. This legislative initiative mandates that operators exceeding specified thresholds obtain an Australian Financial Services Licence (AFSL) and adhere to new asset-holding, transactional standards, and platform rules. The draft legislation, released on September 25, 2025, addresses existing regulatory gaps, aiming to foster innovation while ensuring robust consumer protection and market integrity.
Context
Prior to this draft legislation, Australia’s digital asset sector operated with significant regulatory uncertainty, particularly concerning the custody of digital tokens and the application of existing financial services laws to novel crypto activities. This ambiguity created compliance challenges for platforms and left investors with inconsistent protections. A clear framework is now necessitated to align digital asset operations with established financial regulatory principles and international standards. The new bill directly addresses these long-standing gaps.
Analysis
This legislative action profoundly impacts business operations by requiring digital asset wallet providers and exchange operators to secure an Australian Financial Services Licence, fundamentally altering their operational and compliance frameworks. Firms must now integrate new asset-holding and transactional standards into their systems, ensuring adherence to stringent platform rules and ministerial prohibitions. This introduces a significant compliance burden, necessitating investment in robust internal controls, reporting mechanisms, and legal expertise to navigate the expanded regulatory landscape.
The “same activity, same regulation” approach means existing financial services obligations will apply, demanding a re-evaluation of product structuring and service delivery to meet the heightened regulatory expectations. This is a critical update for any entity operating a digital asset or tokenized custody platform in Australia, establishing a clearer path for legitimate operations while mitigating systemic risks.
Parameters
- Agency/Authority ∞ Australian Treasury
- Legal Document ∞ Treasury Laws Amendment (Regulating Digital Asset, and Tokenised Custody, Platforms) Bill 2025 Exposure Draft
- Jurisdiction ∞ Australia
- Targeted Entities ∞ Digital Asset Platforms (DAPs), Tokenised Custody Platforms (TCPs), Crypto Custodial Services
- Key Requirement ∞ Australian Financial Services Licence (AFSL) for platforms exceeding thresholds
- Exemption Thresholds ∞ Less than $5,000 per customer AND less than $10 million in transactions per year
- Consultation Deadline ∞ October 24, 2025
Outlook
The forward-looking perspective suggests that the consultation period, closing on October 24, 2025, will be crucial for industry stakeholders to provide feedback, potentially shaping the final form of the legislation. This move positions Australia to align its digital asset framework with global standards, potentially setting a precedent for other jurisdictions considering similar comprehensive regulatory updates for custody and platform operations. The implementation of these new rules is expected to enhance investor confidence and attract further institutional participation, fostering a more mature and regulated digital asset market within Australia.
Verdict
This decisive Australian draft legislation for digital asset platforms establishes a foundational regulatory framework, significantly enhancing market integrity and investor protection while paving the way for responsible innovation.