Australia Introduces New Digital Asset Laws to Advance Innovation and Enhance Investor Safeguards

Highlights

• Australia introduced the Digital Assets Framework Bill 2025 to regulate digital asset and tokenised custody platforms under the AFSL regime.
• The legislation aims to improve consumer protection while enabling innovation across digital finance and blockchain technologies.
• New rules require platforms holding customer assets to meet transparency, governance, and dispute-resolution standards, with exemptions for small low-risk providers.

Australia’s Parliament has been presented with new legislation designed to advance the nation’s digital asset ecosystem while increasing safeguards for consumers and investors. The Albanese Government outlined the Digital Assets Framework Bill 2025 as part of a broader strategy to modernise financial regulation and support ongoing developments in blockchain, tokenisation, and digital finance.

Expanding Oversight of Digital Asset Providers

Millions of Australians engage with digital assets each year, and the Government stated that updated rules are necessary to address emerging risks and ensure consistent regulatory standards. The new legislation introduces formal obligations for businesses that custody or facilitate transactions involving digital assets, closing gaps in the current regulatory environment where companies can hold unlimited digital assets on behalf of clients without existing financial protections.

The Bill creates two new regulated financial product categories: digital asset platforms and tokenised custody platforms. Both categories will fall under the Australian Financial Services Licence (AFSL) framework, requiring licensed entities to meet established conduct, disclosure, and operational standards.

New Obligations Under the Digital Assets Framework Bill

Under the proposed legislation, digital asset and tokenised custody platforms must comply with key requirements, including:

• Acting efficiently, honestly and fairly
• Avoiding misleading or deceptive conduct
• Providing clear information about asset custody arrangements and customer rights
• Implementing governance and risk management controls
• Offering dispute-resolution pathways and compensation mechanisms

These obligations have been tailored to account for the operational characteristics and risk profiles specific to digital asset businesses.

Smaller providers handling less than GBP £5,000 per customer and facilitating under GBP £10 million in annual transactions will be exempt from licensing, aligning the approach with exemptions available for other low-risk financial products.

Supporting Market Growth and Safeguarding Consumers

The introduction of the Bill follows research from the Digital Finance Cooperative Research Centre, which indicated that Australia could unlock up to GBP 24 billion in annual productivity gains by enabling broader digital finance adoption. Government ministers noted that digital assets—including cryptocurrencies, stablecoins, and tokenised real-world assets—offer potential benefits across payments, trading, and market access.

The legislation aims to support these developments while limiting risks highlighted by recent international collapses of unregulated digital asset firms. By providing a clearer regulatory structure, the Government aims to encourage investment, support jobs, and improve confidence across Australia’s digital economy.