Australia requires AFSL licences for crypto exchanges and tokenised custody platforms

The Australian government has introduced the Corporations Amendment (Digital Assets Framework) Bill 2025 requiring digital asset platforms and tokenised custody platforms to hold an Australian Financial Services Licence (AFSL). The bill defines two regulated categories: digital asset platforms that custody tokens for clients and tokenised custody platforms that issue single digital tokens representing underlying non-monetary assets. Licensed firms must meet conduct standards (efficiently, honestly and fairly), avoid misleading or unfair contract terms, disclose how customer assets are held, provide dispute resolution and compensation mechanisms, and follow settlement, custody and disclosure rules. Exemptions include platforms holding under AUD 5,000 per customer and processing less than AUD 10 million annually; non-custodial staking is excluded, while custodial staking falls under the regime. The government projects up to AUD 24 billion a year in productivity gains from digital finance and proposes an 18-month phased compliance window (12 months preparation + 6 months transition in earlier reports). Industry response is broadly positive — firms welcome clarity and regulatory alignment with financial services — but experts call for coordination among ASIC, AUSTRAC and the ATO and careful implementation to avoid compliance burdens on smaller operators. The bill also follows stronger ASIC enforcement against scams and phishing. For traders: the reform raises compliance costs for centralized custody/exchange providers, could reduce regulatory risk and scams over time, and may favour regulated platforms versus unregulated alternatives during the transition.