Briefing

The Australian Parliament has introduced the Corporations Amendment (Digital Assets Framework) Bill 2025, which fundamentally reclassifies ‘digital asset platforms’ and ‘tokenised custody platforms’ as financial products under the Corporations Act 2001, thereby mandating that operators obtain an Australian Financial Services (AFS) license. This action eliminates the previous regulatory ambiguity by subjecting platforms holding and dealing in client digital assets to the same rigorous consumer protection, conduct, and disclosure obligations as traditional finance , with the Australian Securities and Investments Commission (ASIC) granting a sector-wide no-action position until 30 June 2026 to facilitate the transition to full compliance.

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Context

Prior to this Bill, the legal status of digital asset platforms and custody services in Australia operated within a patchwork of existing laws, often relying on interpretive guidance from ASIC regarding whether certain tokens constituted financial products. This ambiguity created significant compliance challenges, particularly around custody and exchange operations, where the lack of specific licensing requirements meant consumer protections were inconsistent, and the legal status of activities like staking services remained uncertain, hindering institutional engagement and investment.

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Analysis

The new framework compels digital asset firms to overhaul their entire compliance architecture to meet AFS license standards, specifically by integrating robust risk mitigation controls, comprehensive platform guides, and detailed design and distribution obligations. The immediate cause-and-effect is that platforms must implement rigorous client money handling and custody arrangements, shifting from a bespoke operational model to one aligned with traditional financial services to manage the fiduciary duty now explicitly imposed. This systemic alteration is critical because non-compliance with the new licensing and conduct rules will expose operators to the full enforcement powers of ASIC, directly impacting their ability to legally operate in the jurisdiction. Firms with less than $10 million in annual transaction value are exempt, providing proportionate relief for smaller market entrants.

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Parameters

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Outlook

The Bill’s introduction signals the final phase of regulatory integration, with the next critical step being the parliamentary passage and the subsequent finalization of the detailed regulatory relief instruments by ASIC. This move establishes a clear, unified national standard that is likely to set a precedent for other Asia-Pacific jurisdictions currently debating how to bring digital asset custody and exchange operations under a formal licensing regime. The clear delineation of regulated activities should foster greater institutional confidence, but firms must prioritize the significant operational lift required to meet the 30 June 2026 compliance deadline.

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Verdict

This legislation is a definitive regulatory pivot, moving digital asset platforms from a state of legal uncertainty into a fully integrated, licensed, and accountable financial services sector.

Digital asset platform, Tokenized custody platform, AFS licensing requirement, Financial product definition, Corporations Act amendment, Consumer protection law, Market integrity rules, Licensing and disclosure, Regulatory compliance framework, Financial services perimeter, Digital token definition, Operational risk management, Australian financial regulation, Custody and transfer, Platform guide disclosure, Design and distribution, Unfair contract terms, ASIC enforcement power, Transitional arrangements, Regulatory relief granted Signal Acquired from → regulationtomorrow.com

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australian financial services

Definition ∞ Australian Financial Services refers to the range of financial activities and products regulated within Australia.

digital asset platforms

Definition ∞ Digital asset platforms are online services or systems facilitating the issuance, storage, trading, and management of various digital assets, including cryptocurrencies and non-fungible tokens.

risk mitigation controls

Definition ∞ Risk mitigation controls are specific measures or actions implemented to reduce the likelihood or impact of identified risks.

securities and investments

Definition ∞ Securities and investments broadly refer to financial instruments that represent ownership, a debt relationship, or rights to an asset, typically traded on financial markets.

tokenised custody platforms

Definition ∞ Tokenised custody platforms are specialized digital infrastructure solutions designed to securely store and manage tokenized assets.

financial services

Definition ∞ Financial Services represent the range of economic activities provided by institutions to facilitate the management of money and other financial assets.

compliance deadline

Definition ∞ A compliance deadline marks the specified date by which an entity must meet particular regulatory requirements or legal obligations.

exchange operations

Definition ∞ Exchange operations are the fundamental activities undertaken by a digital asset trading platform to facilitate the buying and selling of cryptocurrencies.

digital asset

Definition ∞ A digital asset is a digital representation of value that can be owned, transferred, and traded.