Australia’s Labor-led government has unveiled plans to regulate cryptocurrency exchanges and custody services under existing financial services laws, part of a broader effort to formalize the country’s digital asset landscape. The proposal, released by the Treasury Department on March 21, aims to extend financial compliance standards to major crypto platforms while offering exemptions for smaller entities.
The proposed framework will bring exchanges, brokerage firms, and custodians under the umbrella of the Australian Financial Services Licence regime, requiring them to meet capital requirements and safeguard customer assets. However, developers of blockchain software and creators of non-financial product digital assets will remain outside the scope of the regulations.
Under the plan, payment stablecoins will be treated as stored-value facilities, although some wrapped tokens and stablecoins may be exempt. Trading in these instruments will not necessarily categorize a platform as a market operator.
This move follows a series of industry consultations launched in August 2022, and the government intends to release draft legislation for public consultation in 2025. Prime Minister Anthony Albanese’s administration has also promised to collaborate with Australia’s four largest banks to examine the extent and impact of de-banking in the crypto sector.
The announcement comes in the lead-up to a federal election, expected on or before May 17. Current polling indicates a tight race between the ruling Labor Party and the opposition Coalition led by Peter Dutton, who has also pledged to prioritize crypto regulation if elected.
Industry stakeholders have cautiously welcomed the reforms. Caroline Bowler, CEO of BTC Markets, described the framework as sensible but emphasized the need for clarity on capital and custody requirements to avoid stifling innovation. Kraken Australia’s managing director, Jonathon Miller, echoed the need for dedicated crypto legislation, stressing that regulatory certainty and solutions to de-banking could unlock economic growth.
In addition to the legislative effort, the Albanese government has pledged to review a potential central bank digital currency and launch an Enhanced Regulatory Sandbox in 2025 to facilitate testing of new financial products without licensing constraints.09:44 AM