Last month, the Albanese government released draft legislation to regulate digital asset platforms after years of discussion. Since then, the treasury has been consulting with stakeholders on the proposal to extend the existing financial services framework to crypto exchanges.
The Treasury Laws Amendment (Regulating Digital Asset and Tokenised Custody Platforms) Bill 2025 will define who can operate a digital-asset platform and how custody must be handled.
“This is a preliminary version of the legislation, and we are seeking stakeholder feedback on its effectiveness and clarity before proceeding further,” said Assistant Treasurer and Minister for Financial Services Daniel Mulino.
If passed, the law will require crypto businesses to hold an Australian Financial Services Licence (AFSL), placing them on the same footing as traditional financial service providers.
Treasury Reviews Feedback
The draft legislation was open for consultation for a month, up until 24 October 2025. Within that month, the government has received lots of responses from exchanges, custodians, and even individuals who have a stake in the matter.
The Treasury will now review the submissions over the next few weeks and send an updated version of the bill to parliament.
The legislation is part of Prime Minister Anthony Albanese’s broader push to integrate digital assets into Australia’s financial system while maintaining strict consumer protections.
It follows two years of reviews and consultations after the collapse of Digital Surge and other local exchanges. The Brisbane-based Digital Surge entered into administration after the downfall of FTX, which held over $33 million (A$50.6 million) of the company’s assets.
While it wasn’t clear at the time what path the government would take to protect Australians, lawmakers on both sides of the aisle agreed something had to be done. As the bill starts to take shape, many exchanges are already taking steps to ensure compliance.
New Regime to Define Who Can Operate Digital Asset Platforms
Under the new framework, any business that holds, trades, or tokenises assets will need to obtain an Australian Financial Services Licence. The bill also introduces Digital Asset Platforms (DAPs) and Tokenised Custody Platforms (TCPs) as new financial products under the Corporations Act.
“The focus of the framework is businesses that hold assets on behalf of clients, rather than on the digital assets themselves,” said Treasury, adding that current laws already cover crypto assets.
“Despite this existing legal and regulatory coverage, failures of digital asset intermediaries have caused major losses for consumers, including in Australia,” Treasury added.
The draft legislation aims to root out unregulated intermediaries who, in many cases, hold billions of dollars in client assets. “It’s about legitimising the good actors and shutting out the bad, giving businesses certainty and giving consumers confidence,” Mulino said.
Digital asset platforms will need to meet the minimum standards set by ASIC for asset holding, transactions, and settlement. In addition, they will be obligated to provide a DAP or TCP guide, which will serve as a disclosure document in place of a traditional Product Disclosure Statement.
However, the draft legislation provides exemptions for small operators in its current form. Platforms that process less than A$10 ($6.52 million) in annual transactions and less than $5,000 ($3,260) per client will be exempt and can continue operating without an AFSL licence.
Clarifying Custody, Tokenisation and Investor Protections
One of the biggest changes the bill will bring revolves around custody. Australia is just one of the many countries that saw thousands of its people lose money following the collapse of local and global crypto exchanges.
The treasury wants to ensure customer funds are protected from misuse and the risk of insolvency. The draft legislation requires digital asset platforms to maintain segregated accounts for client assets and the company’s own assets.
In addition, platforms will need to demonstrate high cybersecurity standards to gain approval. All AFS-licensed operators must also carry out regular audits and publish the reports.
Crypto businesses must also provide a disclosure outlining operational processes, risk management systems, and dispute-resolution mechanisms.
The proposal is undoubtedly expansive but might be what is needed to avoid the chaos seen in 2022. That’s the goal the Albanese government claims to be chasing.
In fact, the draft legislation doesn’t mention blockchain or distributed ledgers, unlike other frameworks in other leading digital asset markets. In the bill’s fact sheet, the Treasury says the aim is for the legislation to be “technologically neutral, so it can adapt as new forms of tokenisation and services emerge.”
Aiming to Be a World Leader in Digital Assets
The Albanese government is attempting to position Australia as a hub for digital finance.
“Australia can be a world leader in digital assets, which are an important part of Australia’s digital economy,” said Andres Charlton, Assistant Minister for Science, Technology and the Digital Economy.
“This draft legislation is the next step as the Albanese Government delivers a framework that creates certainty for industry and keeps Australians safe and secure.”
The proposed bill could help the Australian digital economy attract institutional investors who have been waiting for stronger legal frameworks. Australia aims to quickly catch up with neighbouring Singapore, which adopted its broad sweeping regulatory framework on digital asset platforms on 30 June 2025.
Next Steps: From Review to Potential Implementation in 2026
Following the end of the consultation period, the Treasury will finalise the bill and introduce it to Parliament in early 2026. Exchanges and custodians will then have 18 months to obtain a licence.
While smaller operators may qualify for exemptions, crypto businesses will now have to meet the same consumer protection standards as traditional financial institutions.
The bill is expected to pass in parliament once it’s tabled and will be Australia’s most significant step toward merging its crypto market with mainstream finance.
