Australia passes crypto regulation requiring exchanges to obtain financial services licenses

Australia has enacted groundbreaking crypto regulations requiring cryptocurrency exchanges and custody providers to obtain financial services licenses, enhancing oversight in digital finance.

In a significant move for the cryptocurrency sector, Australia has officially passed its first comprehensive digital-asset law, requiring all cryptocurrency exchanges and custody providers to acquire Australian Financial Services Licenses (AFSL). This landmark legislation aims to enhance regulatory oversight within the rapidly growing digital finance landscape. What Does the New Crypto Regulation Include? The recently enacted Corporations Amendment (Digital Assets Framework) Bill 2025 brings forth a new regulatory framework that categorizes crypto exchanges and custody platforms into two distinct categories: digital asset platforms and tokenized custody platforms . All firms operating in these capacities must secure an AFSL from the Australian Securities and Investments Commission (ASIC) within the next six months. By aligning these platforms with existing regulations that govern brokers and fund managers, the legislation intends to minimize various risks. These include the commingling of customer funds and the misuse of assets, problems that have plagued the cryptocurrency sector and led to substantial financial losses in previous failures. Why Is This Regulation a Game Changer? This regulatory framework is expected to play a crucial role in establishing a solid foundation for institutional participation in the Australian digital asset market. According to industry research, Australia could potentially unlock around A$24 billion annually from the growth of tokenized markets, integration of digital assets, and payments—approximately 1% of the nation’s GDP. Under previous regulatory conditions, the country was on a trajectory to capture just A$1 billion of that value by 2030. The new law is anticipated to streamline operations and clear the path for more investment flows into Australia, marking a pivotal moment for the nation’s digital economy. What Are Industry Leaders Saying? A spokesperson from Kraken welcomed the legislation as a “top-down signal” that reflects A