Australia is taking decisive steps toward establishing a clear regulatory framework for the crypto sector, according to the Treasury’s Statement on Developing an Innovative Australian Digital Asset Industry.
The Treasury said the move aims to provide greater consumer protection, reduce risk, and bring much-needed clarity to the industry.
Regulatory framework
Under the proposed framework, certain crypto firms will be brought under existing financial services laws.
This includes exchanges, custodians, and stablecoin issuers, all of whom must obtain an Australian Financial Services License (AFSL) to operate legally. These businesses would also be subject to new rules designed to reflect the specific nature of digital assets.
The Treasury argued that these measures are essential for reducing custody, liquidity, counterparty relationships, fraud, and cybersecurity risks. Meanwhile, firms dealing in tokenized stored-value products — such as stablecoins used for payments — will need to meet strict requirements.
These include safeguards for customer assets, redemption processes, and liquidity support, mirroring the standards applied to traditional non-cash payment systems.
While the rules aim to bring more structure to the industry, not all crypto-related entities will fall under the new regime. Developers creating non-financial blockchain applications and those building or maintaining decentralized protocols will remain outside the scope.
Additionally, smaller startups that don’t meet the proposed thresholds could also be exempt, though they may still need to follow limited compliance rules.
The Treasury confirmed that a draft version of the legislation will be released later this year for public consultation. Input from the Australian Securities and Investments Commission (ASIC) will help shape the final framework.
Broader reforms
Beyond licensing, the government is exploring broader crypto-related reforms. These include a new Crypto Asset Reporting Framework (CARF) and measures to resolve debanking challenges affecting many crypto businesses.
According to the authorities:
“De-banking can have a devastating impact on de-banked businesses and individuals. It can also stifle competition and innovation in the financial services sector, and negatively impact Australia’s
economy.”
Additionally, the regulators are also examining tokenization laws and the possibility of launching a Central Bank Digital Currency (CBDC).
Meanwhile, the Enhanced Regulatory Sandbox (ERS) will undergo review in 2025. This sandbox lets firms test financial services and credit innovations without needing a license, helping drive safe experimentation within Australia’s fintech space
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