Australia approved legislation on April 1 to establish the country’s first digital asset regulatory framework, requiring all cryptocurrency exchanges and custodial service providers to obtain a financial services license within 6 months in order to operate legally.
This major bill, titled the “2025 Companies Act Amendment (Digital Asset Framework)”, successfully passed both houses of Australia’s parliament on April 1, officially bringing all providers that “hold digital assets on behalf of clients” under Australia’s existing financial services licensing regime.
According to the bill’s content, the Companies Act has added two categories of regulated entities: first, “digital asset platforms” that hold cryptocurrency on behalf of users; second, “tokenized custody platforms” that hold real-world assets (RWA) and issue corresponding digital tokens.
Both categories of providers must apply to the Australian Securities and Investments Commission (ASIC) for a financial services license, subject to the same regulations as brokers and fund managers, including proper custody of client assets, providing standardized information disclosures, strictly prohibiting any conduct that misleads investors, and also establishing comprehensive dispute resolution and investor compensation mechanisms.
It is worth noting that this law does not directly regulate cryptocurrency itself, but rather focuses on the intermediaries that manage clients’ funds, aiming to reduce risks commonly seen in past crypto exchange failures, such as mixing client assets with company funds, platforms being insolvent with liabilities exceeding assets, and the misuse of client assets.
According to research from Australia’s Digital Finance Collaboration Research Centre and industry organizations, with the support of robust regulations, Australia’s tokenization market, payments, and digital asset sectors are expected to create annual output of up to 24 billion Australian dollars, or about 1% of GDP. If estimated based on the prior regulatory pathway, by 2030 it would only be able to generate revenue of about 1 billion Australian dollars.