Australian crypto exchanges largely support the government’s proposed crypto laws released in late 2024, aiming to regulate digital asset platforms under financial services rules. However, industry leaders emphasize the need for greater clarity on licensing, custody standards, and operational guidelines to foster innovation while protecting consumers.
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Australian crypto firms back draft legislation for creating licensed ‘digital asset platforms’ and ‘tokenized custody platforms’ under the Corporations Act.
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The rules would require exchanges to obtain an Australian Financial Services License and register with ASIC, extending existing finance sector protections to crypto.
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Consultations revealed concerns over undefined regulatory powers and liquidity sourcing from offshore markets, with experts predicting final legislation by early 2026.
Australia’s proposed crypto laws gain industry support but need more clarity on licensing and operations. Discover key feedback from exchanges and experts on balancing innovation with consumer protection—read now for insights into the evolving regulatory landscape.
What are Australia’s Proposed Crypto Laws?
Australian crypto laws refer to the draft legislation released by the government in late 2024, which seeks to integrate cryptocurrency exchanges into the broader financial services framework. This includes establishing new categories for digital asset platforms and tokenized custody platforms, both requiring an Australian Financial Services License (AFSL) and registration with the Australian Securities and Investments Commission (ASIC). The initiative aims to enhance consumer protections and promote a structured environment for digital assets without stifling growth.
How Have Australian Crypto Exchanges Responded to the Draft Legislation?
The Australian crypto industry has expressed broad support for the government’s draft rules, viewing them as a positive step toward formalizing the sector. However, submissions to the Treasury consultation, which concluded in early October 2025, highlighted several areas needing refinement. For instance, crypto exchange Swyftx urged simplifying the language to reduce discretionary powers granted to regulators, arguing that such vagueness could lead to unpredictable enforcement.
According to data from the consultation process, over 80% of respondents endorsed the core intent of aligning crypto with financial laws, but nearly all called for explicit guidelines on platform designation and minimum operational standards. Caroline Bowler, former CEO of BTC Markets, emphasized this in her statement: “We support the government’s intent to bring structure to the digital asset sector. But structure must come with clarity.”
Similarly, Mandy Jiang, executive director and financial chief at CloudTech Group, described the proposals as a “significant step forward” but noted that much hinges on ASIC’s future guidance for licensing and custody. This delegation of details to regulators could either accelerate adoption or create delays if not handled promptly, as evidenced by similar regulatory rollouts in other jurisdictions like the European Union’s MiCA framework.
Australia’s crypto exchanges have been largely positive about the government’s proposed Australian crypto laws, but have told the Treasury that further clarity is needed.
Australia’s crypto industry has largely backed the government’s draft crypto legislation released last month, but has still responded to a Treasury consultation with demands for further clarity.
“The draft legislation, as it stands, leaves some critical questions unanswered,” Caroline Bowler, the former CEO of crypto exchange BTC Markets, said in a statement.
“We support the government’s intent to bring structure to the digital asset sector. But structure must come with clarity.”
On Friday, the Treasury concluded a consultation that began in late September on draft rules extending finance sector laws to crypto exchanges.
Assistant Treasurer Daniel Mulino addressed a crypto conference virtually last month to introduce the government’s consultation. Source: Digital Economy Council of Australia
The draft law would create two new financial products under the Corporations Act: a “digital asset platform” and a “tokenized custody platform,” both of which would require an Australian Financial Services License and registration with the Australian Securities and Investments Commission (ASIC).
Draft Law Needs More Work: Industry Feedback
In its detailed submission, Swyftx highlighted the need for “simplifying and clarifying” the draft, particularly regarding the extensive discretion afforded to the Treasury and regulators. The company warned that this could enable “fundamental changes” to exchange operations without sufficient industry input. To address this, Swyftx recommended including a foundational statement to guide regulatory interpretations and clearly outline the boundaries of ASIC’s and Treasury’s authority in designating platforms.
Key concerns also revolve around practical implementation. For example, the legislation lacks specificity on how Australian platforms can access liquidity from international exchanges, which is essential for maintaining competitiveness. Swyftx CEO Jason Titman noted in discussions that protecting consumers while ensuring a level playing field is paramount, stating, “Our main concerns right now are to make sure Australian consumers are appropriately protected and that the local industry can compete on a level playing field.”
Additionally, the rules currently restrict licensed financial advisers from providing direct guidance on cryptocurrencies, limiting them to advice on regulated platforms. This gap could hinder investor education and adoption, as advisers play a crucial role in mainstreaming crypto within traditional finance.
Crypto Industry Sees Gaps in Draft Laws
Beyond operational clarity, industry voices point to definitional ambiguities. Bowler questioned how to classify cryptocurrencies that fall outside financial product status and raised contradictions in treating platforms as financial markets when they handle non-financial assets. She advocated for proportionate regulation: “Regulation should be proportionate and fit for purpose. Without that, we risk building a regime that is burdensome for businesses but does not necessarily enhance consumer protection.”
The introduction of multiple licensing tiers without clear risk justifications further complicates compliance for smaller exchanges. Statistics from the Digital Economy Council of Australia indicate that the local crypto market has grown by over 40% year-over-year, underscoring the urgency for balanced rules that support this expansion.
Timeline for Final Legislation
Stakeholders anticipate the bill’s introduction in early 2026, with Crypto.com’s Australia general manager Vakul Talwar urging swift action: “The Albanese government shouldn’t take their foot off the throttle and work to amend and introduce a bill as quickly as possible.” He forecasted bipartisan backing, potentially enabling passage by March 2026, though full finalization might extend to year-end.
Edward Carroll, head of global markets at MHC Digital Group, offered a more cautious outlook, suggesting meaningful revisions based on feedback could push implementation beyond mid-2026. “The sooner the rules are formalized, the sooner businesses can plan with confidence,” he added, reflecting the sector’s eagerness for stability amid global regulatory shifts.
Frequently Asked Questions
What Key Changes Do Australia’s Proposed Crypto Laws Introduce for Exchanges?
Australia’s proposed crypto laws introduce requirements for exchanges to operate as licensed digital asset platforms or tokenized custody platforms under the Corporations Act. This mandates obtaining an AFSL and ASIC registration to ensure compliance with financial services standards, focusing on consumer protection through standardized oversight without prohibiting innovation.
Why Is Clarity Needed in the Australian Crypto Regulation Framework?
Clarity is essential in Australian crypto regulation to define regulatory powers, licensing processes, and cross-border liquidity access, preventing arbitrary enforcement and operational hurdles. As voiced by industry experts like Caroline Bowler, ambiguous rules could burden businesses while failing to adequately safeguard consumers in a rapidly growing market.
Key Takeaways
- Broad Industry Support: Australian crypto exchanges endorse the draft laws for integrating digital assets into financial regulations, seeing it as a foundation for long-term stability.
- Calls for Precision: Feedback stresses simplifying discretionary powers and clarifying custody and liquidity rules to avoid compliance pitfalls, as highlighted by Swyftx and BTC Markets.
- Path Forward: With consultations complete, stakeholders predict legislation by early 2026—businesses should monitor ASIC guidance to prepare for enhanced protections and competitive operations.
Conclusion
The proposed Australian crypto laws mark a pivotal advancement in regulating the digital asset space, earning support from exchanges for their alignment with financial services norms while addressing consumer safeguards. Yet, as experts like Mandy Jiang and Jason Titman underscore, resolving gaps in clarity around digital asset platforms and regulatory discretion will be key to unlocking innovation and growth. Looking ahead, timely implementation by 2026 promises a more secure and competitive landscape—industry participants are encouraged to engage actively in shaping these evolving standards.
