Australia Senate committee backs licensing for crypto firms

Australia is a step closer to overhauling how cryptocurrencies are regulated after a Senate committee recommended passing a bill that would bring digital asset platforms into the country’s financial licensing regime.

In a report released this week, the Senate Economics Legislation Committee said the proposed Corporations Amendment (Digital Assets Framework) Bill 2025 would offer stronger protections for consumers while attempting to keep pace with global standards. The bill requires crypto platforms, particularly those that hold customer assets or execute trades, to obtain an Australian Financial Services Licence. This would place them under similar obligations to traditional financial service providers.

Rather than trying to regulate blockchain technology itself, the framework focuses on the businesses that sit between users and the market. Regulators see these intermediaries as the point where risks are most likely to emerge, especially when it comes to custody of funds and the handling of transactions.

The bill also aims to clarify how existing financial laws apply to crypto, defining key terms such as digital tokens and setting expectations around disclosure, trade execution and the safeguarding of client assets.

The legislation is part of a wider effort by the Australian Treasury to put clearer guardrails around the fast-growing crypto sector, which has until now operated in a relatively uncertain regulatory environment.

Balancing innovation and risk

The committee acknowledged that designing effective crypto regulation is not straightforward. Any framework needs to manage risk without stifling innovation while also aligning with approaches being developed in other jurisdictions.

Despite those challenges, the report concluded the proposed rules strike a reasonable balance and would improve oversight in areas that have long concerned regulators.

Industry broadly supportive, with caveats

As reported by the Block, feedback from industry participants is largely positive, with many welcoming the move towards clearer and more consistent rules. However, there are concerns about how widely certain definitions could be interpreted.

There are concerns that terms like “possession” and “factual control” prompt questions about whether the rules might inadvertently capture businesses that do not directly control customer funds. Treasury officials indicated they are open to refining some of these issues through secondary regulation, while defending the overall structure of the bill.

What’s next

The legislation was introduced in late 2025 and has already passed the House of Representatives. Following the committee’s recommendation, it now returns to the Senate for further consideration. If approved, crypto businesses would be given a six-month transition period to comply with the new licensing requirements.

Due to growing popularity and pressure from around the world for more precise regulations, Australia is taking action to regulate cryptocurrencies. Australian adults now use digital assets at a rate of 31 percent, up from 28 percent the previous year. With an emphasis on innovation and consumer protection, the Australian Treasury and ASIC are spearheading initiatives to incorporate crypto supervision into the financial system. Similar laws have already been enacted in nations like the US, Singapore, and the EU. The new law from Australia seeks to lessen risks like market volatility and fraud.

Last year, ASIC announced that stablecoin intermediaries distributing coins issued by licensed providers will not be required to obtain separate financial services licences. This exemption marks a regulatory adjustment aimed at aligning financial oversight with developments in digital assets.