Australia has moved a step closer to a comprehensive regulatory framework for cryptocurrency platforms after a Senate committee recommended the passage of a bill that would bring large parts of the industry under the country’s existing financial services laws.
The Corporations Amendment (Digital Assets Framework) Bill 2025 received support from the Senate Economics Legislation Committee in a report released Monday. Lawmakers described the proposal as a major step toward stronger oversight of the digital asset sector while maintaining a technology-neutral approach.
The recommendation advances Australia’s effort to address gaps in regulation that emerged as crypto platforms expanded rapidly and began holding significant volumes of customer assets.
Proposed law would license crypto intermediaries
The legislation focuses on businesses that operate digital asset platforms or tokenized custody platforms. These entities facilitate trading or hold digital tokens on behalf of customers.
Under the proposal, such firms would fall under the same financial services framework that governs traditional financial institutions. Most platforms would need to obtain an Australian Financial Services Licence and comply with rules under the Corporations Act and the Australian Securities and Investments Commission Act.
The framework does not regulate blockchain technology itself. Instead, it targets intermediaries that manage customer funds or provide trading infrastructure, which regulators identify as the primary risk point in the digital asset ecosystem.
Licensed platforms would need to follow custody and settlement standards set by the Australian Securities and Investments Commission. The rules also include disclosure requirements for retail clients as well as governance and conduct standards tailored to digital asset platforms.
Lawmakers designed the framework to strengthen protections for users whose assets remain exposed when exchanges or custodians fail.
Oversight gaps draw attention after crypto collapses
The proposed regime aims to address concerns that some crypto businesses currently operate without the safeguards required in traditional finance. Regulators and lawmakers began pushing for stronger oversight after high-profile failures in the digital asset sector exposed vulnerabilities in platforms that hold customer funds.
Australia already requires cryptocurrency exchanges to register with the financial intelligence agency AUSTRAC. The new bill goes further by placing many operators directly within the financial services licensing system.
The Senate committee acknowledged the challenge of writing regulations that manage risks while remaining compatible with global frameworks.
In its report, the committee wrote that developing rules capable of identifying and controlling risk in the digital asset sector is a “considerably difficult undertaking,” but concluded the proposed bill represents a “substantial improvement” in the regulation of digital assets in Australia.
Industry raises concerns over terminology
Industry submissions reviewed by the committee generally supported the effort to modernize regulation but warned that certain definitions in the draft legislation could create unintended consequences.
Law firm Piper Alderman argued that broad interpretations of terms such as “digital token” and “factual control” might capture infrastructure providers that do not actually control customer assets. Such definitions could potentially apply to wallet software or multi-party security systems.
Blockchain firm Ripple Labs also commented on the draft framework. The company supported the concept of “control” as the appropriate boundary for regulation but said the bill should better reflect modern security technologies such as multi-party computation wallets.
Ripple warned that a strict interpretation of the “factual control” test might classify technology providers that hold only one piece of a multi-key security system as regulated custodians.
The company urged lawmakers to clarify that factual control exists only when a party can move assets without the client’s participation.
The Senate committee acknowledged these concerns but supported the Treasury’s approach of refining details through future regulations rather than altering the bill’s core definitions.
Exchanges welcome progress but highlight banking challenges
Crypto companies operating in Australia reacted cautiously but positively to the committee’s recommendation.
In an statement, Coinbase Australia director and APAC managing director John O’Loghlen described the recommendation as “an important step for Australia’s standing in the global digital economy.”
He said clearer rules could help the country unlock the potential of its digital asset sector.
O’Loghlen also warned that crypto firms still face challenges accessing banking services.
“The anti-competitive practice of debanking is rampant despite the government endorsing measures to address it back in 2022,” he said, urging authorities to prioritize implementation of recommendations issued by the Council of Financial Regulators.
Industry leaders have argued that regulatory clarity could also support broader economic benefits. Kate Cooper, CEO of OKX Australia, said that clearer legislation may strengthen productivity and help businesses participate in global blockchain networks within a regulated environment.
Next stage in parliamentary process
The bill now proceeds to the Senate for debate and a final vote at a later date.
If lawmakers approve the framework, digital asset platforms that do not already hold the required financial licenses would receive a six-month transition period to comply with the new rules.
The proposal represents Australia’s most comprehensive attempt so far to integrate cryptocurrency platforms into its established financial regulatory system.
Oleksii Shumak
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