Australian Senate committee backs crypto regulation framework for platforms

The Australian Senate Economics Legislation Committee has recommended the passage of a major cryptocurrency regulatory bill that would require financial licenses for crypto platforms.

“Australian Senate panel backs crypto regulation framework The Senate Economics Legislation Committee said the proposed legislation will modernize digital assets regulatory framework”

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This endorsement came in a report published on Monday, supporting the Corporations Amendment (Digital Assets Framework) Bill 2025.

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The bill aims to modernize how digital assets are regulated in Australia by bringing crypto platforms and custody providers under the country's existing financial services framework.

This legislative move represents Australia's comprehensive approach to establishing clearer rules for market participants.

The committee acknowledged that developing rules capable of identifying and controlling risk while remaining technology-neutral is a 'considerably difficult undertaking.'

However, they concluded that the bill delivers meaningfully stronger safeguards for Australian consumers.

The proposed regulatory framework would create a licensing and compliance regime for businesses operating digital asset platforms or tokenized custody platforms.

These businesses would be treated similarly to other financial service providers under Australian law.

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The bill focuses on intermediaries that hold customer assets or facilitate trading, rather than regulating the underlying blockchain technology.

Key aspects include defining concepts like 'digital tokens' and clarifying how existing financial services laws apply to crypto platforms.

The legislation would introduce rules for asset custody, transaction execution, and disclosure requirements for retail clients.

The framework would also establish standards for safeguarding customer assets.

Industry feedback on the proposed legislation has been largely positive, with stakeholders broadly welcoming the government's efforts to modernize Australia's regulatory framework.

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The Senate committee's inquiry received submissions from exchanges, fintech associations, and law firms.

These stakeholders supported the bill's overall direction for creating clearer market rules.

However, several raised concerns about certain definitions, particularly 'digital token,' 'possession,' and 'factual control.'

They warned these terms could impact infrastructure providers or non-custodial services.

The Treasury largely defended the existing draft and said multi-party arrangement issues could be addressed in forthcoming regulations.

The regulatory timeline includes a six-month transition period for businesses without required financial licenses.

This would give affected firms time to obtain authorization and meet new requirements.

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The bill was introduced by Treasury in November 2025 and passed third reading in House on February 4.

It was referred to Senate the next day and has undergone review with industry feedback.

The Senate committee released its supportive report on Monday.

The legislation remains before the Senate and has not yet become law, requiring additional legislative steps.