Australia passes its first “cryptoasset regulatory law”! Exchanges and custodians are brought under a financial services licensing regime

On April 1, Australia officially passed legislation to establish the country’s first nationwide 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 “Company Law Amendment (Digital Asset Framework) Bill 2025,” successfully cleared both the Australian House of Representatives and the Senate on April 1, officially bringing all businesses that “hold digital assets on behalf of clients” under Australia’s existing financial services licensing regime. Under the bill’s provisions, the Company Act adds two types of regulated entities: first, “digital asset platforms” that hold cryptocurrency on behalf of users; and second, “tokenized custody platforms” that hold real-world assets (RWA) and issue corresponding digital tokens. Both types of firms must apply to the Australian Securities and Investments Commission (ASIC) for a financial services license, and they are subject to the same rules that apply to brokers and fund managers, including proper custody of client assets, standardized information disclosures, a strict prohibition on any conduct that misleads investors, and the requirement to establish robust dispute resolution and investor compensation mechanisms. It’s worth noting that this law does not directly regulate cryptocurrency itself; instead, it targets the firms that act as intermediaries and manage clients’ funds, with the goal of reducing risks commonly seen in past cases where cryptocurrency platforms collapsed, such as the mixing of client assets with company funds, platforms becoming insolvent with liabilities exceeding assets, and the misuse of client assets. According to research by the Australia Digital Finance Cooperative Research Centre and industry organizations, with the boost of sound regulation, Australia’s tokenization market, payments, and digital asset sector could generate up to AUD 24 billion in economic output each year—about 1% of GDP. If projections based on the prior regulatory path are used, by 2030 it would generate only about AUD 1 billion in revenue.