In November 2025, the Australian Treasurer and the Minister for Financial Services officially introduced the Corporations Amendment (Digital Assets Framework) Bill 2025 (the "Digital Asset Framework Bill") to the Federal Parliament. This bill plans to bring "Digital Asset Platforms" and "Tokenized Custody Platforms" under the umbrella of the Corporations Act. Specifically, it intends to use the Australian Financial Services License (AFSL) system to put crypto trading and custody services fully under the watch of the Australian Securities and Investments Commission (ASIC).

FinTax Commentary believes this move shows that Australia wants to keep its current "taxing crypto under existing laws" vibe while filling in the legislative gaps for crypto trading and custody. This marks Australia’s shift from a basic "bottom-line" regulation model toward a full-blown financial oversight model focused on platforms and custody. This article will look at Australia’s current crypto tax and regulatory setup, break down the core parts of the Digital Asset Framework Bill and the shift in regulatory thinking it represents, and evaluate how this legislation might hit the compliance costs, business models, and international plans for crypto exchanges and custodians operating in Australia. We hope this provides some good insights for Web3 Participants and researchers.

1. Australia’s Current Crypto Regulatory Setup

Before the "Digital Asset Framework Bill" kicks in, Australia’s crypto regulation is mainly made up of three layers: tax regulation, Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regulation, and some scattered financial regulations.

On the tax side, Australia generally doesn't create new taxes just for crypto. Instead, it prefers using existing tax laws for all crypto transactions. In 2021, the Board of Taxation worked with law firms and accounting firms to review how digital assets and related transactions are taxed, leading to a 2024 report. The report found that current tax laws can mostly handle crypto and related trades. The Treasury agreed and doesn't think we need specific crypto tax laws right now. So, while Australia recognizes that crypto is unique, it won't be introducing a "crypto tax" or massive new rules, opting instead to apply existing ones.

Regarding AML/CTF regulation, Australia was one of the first countries to pull Digital Currency Exchange (DCE) service providers into the AML/CTF net. Amendments to the AML/CTF Act in 2018 brought DCEs under regulation for the first time. This meant any agency trading fiat for crypto in Australia had to register with the Australian Transaction Reports and Analysis Centre (AUSTRAC) and handle duties like KYC, suspicious activity reporting, and large transaction reporting. This registration became a mandatory requirement and remains a key part of Australia’s crypto AML/CTF oversight today.

For the scattered financial regulations, existing laws mainly check "if the crypto business looks like a traditional financial product." If a crypto asset is essentially a security, derivative, or part of a managed investment scheme, then its issuance, trading, and advice fall under ASIC's financial oversight. On the flip side, typical "pure cryptocurrencies" like Bitcoin or ETH, and trading platforms that don't deal with derivatives, usually aren't seen as financial products or services and don't have to follow those financial rules.

In short, before the "Digital Asset Framework Bill," Australia already had a multi-layered governance framework through tax, AML/CTF, and scattered financial regulations. If this bill passes, it will unify the legal standards for crypto, clearing up the boundaries and duties for everyone involved.

2. How the "Digital Asset Framework Bill" Plans to Regulate Crypto Trading

The logic behind the proposed Digital Asset Framework Bill is pretty simple: first, define the platforms; second, treat them as financial products; and finally, use the Australian Financial Services License (AFSL) to regulate the operators. The bill also has a lot of features specifically tailored for the crypto industry. Here’s the breakdown:

First, it adds two new financial products to the Corporations Act: Digital Asset Platform (DAP) and Tokenized Custody Platform (TCP). A DAP is a "facility" where an operator holds digital tokens for clients—think centralized exchanges and custodial wallets. The key for a TCP is "real-world asset tokenization." Here, the operator identifies an underlying asset (excluding currency), creates a digital token representing the right to that asset, and holds the underlying asset in custody. For example, using physical gold, real estate, or bonds as the base to issue tokens that investors can redeem or trade. By defining these two concepts, the bill treats the business of holding digital and tokenized assets for others as a financial product for the first time, rather than just trying to squeeze them into old rules.

As mentioned, once DAPs and TCPs are labeled as financial products, providing services like issuance, trading, custody, or advice around them generally requires an AFSL. The Treasury has made it clear that companies offering these platform services must get an AFSL and face oversight from ASIC, with the same basic duties as traditional financial service providers. For CeFi exchanges and custodians, this means if the bill passes, they’ll need to act more like traditional regulated financial institutions regarding organizational structure, compliance, risk management, asset segregation, disclosure, and dispute resolution.

Additionally, the Digital Asset Framework Bill shows some "out of the box" thinking. It offers AFSL exemptions for platforms that pose very low risk to clients. This includes "low-value businesses" (those below certain financial thresholds) and providers where the service isn't a "major part of their business." The first applies to platform operators, while the second applies to people providing services related to those platforms. The bill also states that if a platform holds client tokens to participate in staking and distribute rewards, that's "custodial staking" and is regulated. But if users keep their own private keys and stake directly on-chain, that's "non-custodial staking" and is outside the bill's scope. For "wrapped tokens" where the holder can redeem them, the bill ignores the redemption right itself and focuses on the actual nature of the asset or right it represents.

Operationally, the bill confirms that open public blockchain infrastructures like Bitcoin and Ethereum won't be labeled as financial products or market infrastructure. This avoids putting impossible compliance burdens on bottom-layer open-source protocols. Also, if the bill passes, there will be an 18-month transition period after the reforms start.

3. What the Bill Tells Us About Where Australia is Heading with Crypto

The introduction of the Digital Asset Framework Bill marks a brand-new phase for crypto in Australia and reflects a big shift in regulatory thinking over the last few years.

First, it’s a total breakthrough. As mentioned earlier, Australia didn't really have specific financial oversight for crypto platforms and custody—it mostly just focused on "bottom-line" stuff like anti-money laundering. Bringing these platforms into mainstream financial regulation means the government now sees the digital asset industry as needing the same strict supervision as securities or derivatives. This shift was pushed by global trends and high-profile risks. Globally, we saw the EU’s MiCA in 2023, the US ramping up enforcement on exchanges, and Asian hubs like Singapore launching licensing systems. Locally, Aussie investors jumped deep into crypto, and the collapse of offshore exchanges like FTX hit local users hard, sparking calls for better regulation. So, the government decided to follow the trend and tighten the rules. The signal is clear: Australia no longer sees crypto as a "special zone" outside the financial system; it’s being brought inside the tent.

Second, Australia's vibe has shifted from "wait and see" to "active governance." Looking at the government's moves over the last two years, you can see a clear path: between late 2022 and early 2023, the Treasury did "Token Mapping" research. This meant figuring out what different tokens actually do and if current laws cover them, to find the gaps. Back then, the stance was "let’s figure out what to regulate before we decide how." The February 2023 report set the stage for which tokens needed new laws and which didn't. By late 2023, they drafted the first version of the platform framework (the draft released in September 2025) and asked for feedback. After months of polishing, it hit Parliament in November 2025. From research to legislation, the regulators have clearly stepped up. Even after the Albanese government took over in 2022 and people worried things might slow down, the progress shows they realize regulation is a must. This shift from "no rules" to "rules" sends a message: Australia wants a trustworthy framework to protect investors and attract legit business. The Treasury emphasized this will "strengthen consumer protection, modernize the system, boost confidence, and attract investment." Basically, they aren't trying to kill the industry; they’re trying to find a balance between safety and innovation. This matches many Western countries: embrace the tech, but build firewalls against the risks.

Third, the new bill shows a slight tweak in policy focus. A few years ago, the focus was on taxes and stopping illegal activity. Now, it’s moved toward regulating institutions and protecting investors. Early talks were about how to tax crypto or if people were using it to dodge taxes. Recent moves—like requiring licenses and trying to fix the relationship between banks and crypto—are about building a fair and orderly market. The "compass" has moved: crypto isn't just a niche speculative tool anymore; it’s a mainstream part of the financial ecosystem that needs regular rules. The government’s understanding is also more well-rounded now. They’ve started CBDC research, supported the Reserve Bank’s eAUD pilot in 2023, and plan to discuss a broader digital finance innovation sandbox in 2025. These moves show they are trying to balance control with innovation. They’re being tough on middlemen while leaving room for new tech like CBDCs and DeFi. You can bet that in the future, Australian crypto won't be a "wild west" anymore—it’ll look more like traditional finance with licenses, risk monitoring, and global coordination, while still exploring new tech to stay competitive.

Finally, the new framework syncs up with the global crypto wave. Especially on investor protection, Australia has borrowed a lot from others, like requiring platform-client asset segregation and compensation schemes—similar to New York’s rules or the reserve requirements in Europe’s MiCA. By folding crypto into the existing financial license system (instead of making a whole new set of laws), Australia is following the lead of the UK and Singapore. This uses a mature system to handle new assets, ensuring consistency across markets. As the FATF pushes the "Travel Rule" and the G20 talks global standards, this new bill makes it easier for Australia to play ball internationally. For example, once AUSTRAC expands its reach in 2026, Australia will basically meet all FATF requirements for Virtual Asset Service Providers (VASPs).

Overall, Australia has gone from being a spectator to an active player. By creating rules through legislation, they aren't just waiting for a global consensus anymore. This helps Australia have a bigger voice in global digital asset talks and builds its image as a "trusted and competitive digital asset innovation hub."

4. What This Means for Web3 Participants

The new rules will have a huge impact on Australia’s crypto scene in both the short and long run.

In the short term, the industry will feel the heat of compliance and a bit of a shake-up. For exchanges and custodians currently active in Australia, getting an AFSL and following the new rules will be the new price of admission. Web3 Participants will need to evaluate their business and hand over detailed plans, risk strategies, and compliance setups to ASIC during the transition. This is a big test for legal and compliance teams. Smaller players might leave the market or just serve overseas clients, leading to some industry consolidation. Bigger players will likely put in the money and manpower to get licensed and fix their internal processes. While this raises costs, it makes the platforms more stable. Also, with the government’s stamp of approval, Aussie investors will likely prefer AFSL-licensed platforms because they are seen as safer and more trustworthy. Companies without a license will be seen as "underground" or offshore, making it harder to get customers and even harder to work with banks. So, the new policy will weed out the weak: legit operators will grow, and the rest will fade away or move to the shadows.

In the mid-to-long term, the industry will get more chances for standardized growth and global cooperation. Bringing crypto under government watch helps it become more professional and scale up. Once investors feel protected, more mainstream institutions and individuals will feel safe joining in, which grows the market. Also, having a license helps crypto companies connect with traditional finance—making it easier to get bank accounts, insurance, or even run legal ads. All this makes the crypto ecosystem more sustainable. Plus, a clear legal environment attracts international capital and companies. For crypto firms looking to expand globally, Australia now has a clear path: get an AFSL and set up shop. Compared to places with uncertain rules, Australia’s solid legal system and investor market are very attractive. If the bill passes, it’ll help Australia become a key digital asset hub in the Asia-Pacific.

For consumers and investors, the bill is good news. The most direct benefit is that their money is safer. The bill requires platforms to be transparent about how they hold assets and to tighten risk controls, with ASIC keeping an eye on them. This lowers the chance of users losing money because of a platform’s bad behavior or bankruptcy. Since licensed platforms have to report regularly, the market becomes more transparent, letting investors compare different services more easily. Basically, regulation provides a safety net, which helps create a more mature and rational investor community over time.

However, it’s not all sunshine and rainbows; there are challenges too. As compliance costs go up, platforms might pass those costs to users through higher fees or lower staking yields, which could dampen some enthusiasm. Innovation might also slow down a bit. In a "free" market, testing new stuff is cheap; under regulation, every new feature needs a compliance check. But this "slowdown" usually leads to "slow and steady" growth—trading some wild, aggressive growth for a healthier, more mature industry.

5. The Future of Australian Crypto Regulation

Looking ahead, we think Australia’s crypto regulation will keep moving toward being more institutionalized, refined, and globally focused.

Institutionalization means the framework will become a permanent part of the law. Once this bill passes, we expect more detailed guidelines on things like capital requirements (to prevent "runs" on platforms), independent third-party audits for custodial assets, and standard disclosure formats. The government might also look at updating other laws. For example, the Insolvency Act might need rules on who gets the crypto first if an exchange goes bust, or the Securities and Tax Acts might need to sync up their definitions with the new bill. Over time, crypto will likely be folded into all areas of law—like inheritance, anti-fraud, and accounting—becoming a true part of the economy.

Refinement means regulation will adapt as the industry evolves. Once the license system is up, ASIC and the Treasury will likely watch for new risks. Stablecoin regulation could be next on the list, and DeFi oversight might get tougher. We might even see talks about NFTs and Metaverse assets if they start acting like financial tools (like NFT staking or fractional trading). Basically, regulators will keep "mapping" the industry to see what needs a new rule or a "sandbox" to test things out. This kind of management keeps regulation from falling too far behind without killing innovation.

On global cooperation, Australia will likely team up more with other countries. Crypto is global, so one country's rules need others to help. This includes law enforcement: if an unlicensed offshore exchange targets Aussies, ASIC will need to work with that country's regulators. Australia is already part of the FATF and IOSCO, which are pushing global standards. Our policies will also look at international experience—like what we can learn from the EU’s MiCA, Singapore’s licensing results, or the US stance on DeFi. Soon, the world’s major economies will likely have similar rules, leading to mutual recognition or shared regulatory sandboxes.

From a big-picture view, these moves give Australia more control over its digital economy transition. The government sees blockchain and digital assets as the future of finance, and regulation is about giving them legitimacy and power. Once the framework is mature, we’ll see crypto and traditional finance blend more smoothly—think Security Token Offerings (STOs), tokenized asset platforms running legally, traditional funds investing in digital assets, and banks offering safe custody. These "forbidden zones" of today could become the markets of tomorrow, unlocking huge potential.

6. Conclusion

To sum it up, Australia’s recent moves in crypto tax and regulation show a clear trend toward being more standardized and proactive. From keeping the existing tax vibe to filling in the gaps with the first specialized bill, Australia is racing to catch up with the rest of the world. In this new era, Web3 Participants will face higher standards and more responsibility, while investors get more protection and confidence. It’s a mix of challenges and opportunities. Companies should embrace the rules and fix their internal governance to stay legal; investors should stay sharp and stick to licensed channels. Over the next few years, we’ll keep watching how Australia’s crypto rules evolve, and its successes (or mistakes) will be a great lesson for other countries too.