Australia Moves to Regulate Crypto Under Financial Services Framework
Australia Moves to Regulate Crypto Under Financial Services Framework
Australia’s Draft Law Brings Crypto Into the Financial System
Australia is stepping closer to treating crypto like any other part of its financial system. The treasury has published a new draft law that would bring digital asset firms under the same rules as banks, brokers, and managed funds.
The plan is simple. If you run a digital asset platform (DAP) or a tokenised custody platform (TCP), you will need a financial services licence. These licences already apply to financial intermediaries. Now, they will also cover crypto businesses.
The Australian Securities and Investments Commission (ASIC) will be in charge of regulating these firms. That means more rules, more oversight, and more accountability.
Assistant Treasurer Daniel Mulino introduced the draft on Thursday. He said the law is designed to extend financial services rules without starting from scratch. “The final legislation will introduce a new framework for digital asset businesses in Australia,” Mulino said. “It will do so by extending existing financial services laws but in a targeted way.”
For now, the draft is open for consultation until 24 October 2025. After that, the treasury will refine the text before moving it forward.
Why Australia Wants to Regulate Crypto
The new draft is not just about paperwork. It’s about consumer protection and market stability. Without rules, crypto platforms can collapse, scam, or mismanage customer funds. Australians have seen this happen globally with major failures like FTX. Regulators don’t want the same risks playing out locally.
By forcing firms to get licensed, the government ensures that platforms follow strict standards. These include transparency, proper custody of funds, and risk controls. It also gives ASIC the power to crack down on bad actors.
For consumers, this means more trust. If a platform is licensed, it should meet the same expectations as any other financial institution. For firms, it means a level playing field. Unregulated operators will no longer be able to undercut compliant businesses.
Industry Voices on the Draft
Not everyone sees regulation as a burden. Some in the industry view it as a turning point. Kate Cooper, CEO of OKX Australia, said the proposal proves crypto is no longer a fringe industry. “The draft legislation is the clearest signal yet that crypto is no longer operating on the fringes and is now embedded in the financial system,” she said.
She also pointed out that enforcement will decide its success. “The real measure of this reform will be shown by the compliance and enforcement that follows its implementation, ensuring that unregulated players don’t undercut responsible, licensed operators and that Australian consumers are protected.”
Her comments highlight a common theme. Clear rules can build trust, but only if they are applied fairly.
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How Australia Compares to Global Moves
Australia is not acting alone. Around the world, governments are working out how to regulate crypto.
Europe has already passed the Markets in Crypto-Assets (MiCA) framework. It creates one set of rules for all EU countries and will roll out in 2024. The United States, meanwhile, is taking a more aggressive stance, with the SEC classifying many tokens as securities and suing firms that operate outside its oversight.
Australia’s draft takes a middle path. Instead of building a new system, it extends existing financial laws. This approach avoids duplication and gives regulators familiar tools.
Analysts say the move could make Australia more attractive to global operators who value regulatory clarity. At the same time, smaller startups may struggle with compliance costs, pushing them offshore.
What Happens Next
The consultation period is now open. Crypto firms, consumer groups, and financial experts will have until late October to submit feedback.
After that, the government will finalise the draft and move towards implementation. The focus is balance. Too much regulation could stifle innovation. Too little could leave Australians exposed.
Mulino said the government is working to “get it right.” The draft is targeted, not blanket. It aims to make sure crypto firms meet the same standards as other intermediaries, without crushing the industry.
For businesses, the message is clear: prepare for change. Compliance will soon be part of the cost of doing business. For consumers, the draft offers hope that the market will become safer and more transparent.
Australia’s draft comes as global crypto regulation heats up. Europe’s MiCA is due next year, and the U.S. continues to tighten its grip through the SEC. These moves show a common trend: crypto is no longer outside the system, it is becoming part of it.
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