Australia Passes Landmark Crypto Law Requiring Exchanges to Get Financial Licences

Australia has passed its first comprehensive crypto law. Exchanges and custody providers must obtain Australian Financial Services Licences under the same regime that governs brokers and fund managers. Firms have six months to comply.

Australia has passed its first dedicated regulatory framework for digital assets. The Corporations Amendment (Digital Assets Framework) Bill 2025 cleared both houses of parliament on April 1, bringing crypto exchanges and custody providers under the same licensing regime that governs brokers and fund managers.

The bill had been working through parliament since November 2025, when it was introduced by Assistant Treasurer Daniel Mulino. It passed the House of Representatives in February, received backing from the Senate Economics Legislation Committee in March, and was approved by the full Senate on Tuesday.

Exchanges and Custody Providers Now Need the Same Licences as Brokers

The legislation creates two new regulated categories under the Corporations Act. Digital asset platforms cover services like crypto exchanges that hold customer tokens. Tokenised custody platforms cover firms that hold real-world assets and issue corresponding digital tokens.

Operators of both must obtain an Australian Financial Services Licence from ASIC, putting them under the same core obligations as traditional financial service providers. That includes requirements to safeguard client assets, provide standardised disclosures, maintain dispute resolution processes, and avoid misleading conduct.

The law targets intermediaries that hold customer funds rather than the underlying blockchain technology itself. The reasoning is straightforward: the collapses of FTX and other platforms that held customer assets without adequate safeguards demonstrated where the real risk sits. Platforms that don't hold customer assets, including most decentralised protocols, fall outside the scope of the bill.

Smaller operators with annual transaction volumes below A$10 million are exempt, as are certain public blockchain infrastructure providers.

Six Months to Get Licensed or Stop Operating

Firms that don't currently hold the required licence have a six-month transition period from the date the law takes effect. After that, operating without an AFSL will carry civil and criminal penalties.

The compliance costs are not trivial. Regulators estimate the framework will cost the industry approximately A$28.4 million annually. But the government's position is that those costs are outweighed by the benefits: attracting institutional capital, supporting an estimated 1,000 new startups per year, and capturing a share of what the Digital Finance Cooperative Research Centre estimates could be an A$24 billion annual digital finance opportunity for Australia.

Offshore firms with Australian customers will also need to comply. Ripple is already in the process of acquiring BC Payments specifically to secure an AFSL as it expands its Asia-Pacific payments operations.

Australia Takes a Different Path From Europe

Where the EU built a standalone regulatory regime with MiCA, Australia has chosen to fold crypto into its existing financial services framework. The practical effect is similar (licensing, disclosure, custody standards) but the implementation is different. By using the AFSL system rather than creating a new regulatory body or bespoke licence category, Australia can move faster on implementation.

The trade-off is that crypto platforms will be held to the same compliance standards as traditional financial service providers, which could be burdensome for smaller operators. Industry groups flagged concerns during the Senate committee review that some definitions in the bill, particularly around "digital token," "possession," and "factual control," were too broad and could unintentionally capture wallet software providers and non-custodial infrastructure.

The Treasury said some of those issues would be addressed in secondary regulations still to come.

The Debanking Problem Hasn't Gone Away

One issue the bill doesn't solve is banking access. Australian crypto firms have faced persistent debanking, where banks terminate their accounts without explanation, citing risk appetite or strategic direction. The government acknowledged the problem in 2022. The Council of Financial Regulators made recommendations. Little has changed in practice.

John O'Loghlen, Coinbase's Australia director, welcomed the bill but pointed out the contradiction: the government is pulling crypto platforms into the regulated financial system while the regulated financial system still won't reliably bank them. If licensed platforms can't access basic banking rails, the licence itself becomes less useful.

That tension isn't unique to Australia; UK firms with full FCA authorisation face similar difficulties, and the U.S. went through its own debanking episode under what the industry called Operation Chokepoint 2.0. Regulation and banking access are two separate problems, and solving one doesn't automatically fix the other.