Australian Senate Committee Backs Crypto Licensing Bill, Setting Compliance Template for Emerging Markets
Australia's upper house committee has endorsed a law that would require crypto exchanges and custodians to obtain the same financial services licence as banks and brokerages, with penalties for non-compliance set at a minimum of AU$16.5 million and scaling higher based on business size and the extent of the breach.
An Australian Senate committee gave its formal approval on March 16, 2026, to the Corporations Amendment (Digital Assets Framework) Bill 2025, clearing a major procedural hurdle for what would become the country's first comprehensive crypto licensing regime. The bill, introduced by the Albanese government in November 2025 under Treasurer Jim Chalmers and Assistant Treasurer Daniel Mulino, now moves to a full Senate and House of Representatives vote before receiving royal assent. The bill's progress follows the 2023 rejection of a crypto licensing bill put forward by opposition Senator Andrew Bragg, a contrast that underscores the broader institutional support the current legislation has secured under the Labor-led government.
What the Bill Does
The legislation creates two new regulated product categories. The first, Digital Asset Platforms (DAPs), covers custodial exchanges, brokers, and wallets where the operator holds client assets on the user's behalf. The second, Tokenised Custody Platforms (TCPs), covers facilities that issue tokens representing claims on real-world non-monetary assets such as bullion.
Operators in both categories must obtain an Australian Financial Services Licence (AFSL) from the corporate regulator ASIC, meeting standards of efficiency, honesty, and fairness already applied to traditional finance.
The bill amends the Corporations Act 2001 and the Australian Securities and Investments Commission Act 2001. It takes effect 12 months after royal assent, with existing operators given 18 months to comply and six months from commencement to lodge an AFSL application. Platforms holding less than AU$5,000 per customer and processing less than AU$10 million annually are exempt, as are non-custodial service providers where users retain direct control of their own assets. Among the major exchanges that will need to assess their AFSL compliance obligations are Swyftx, CoinJar, Binance, Coinbase, and Kraken.
The Gap This Law Closes
Australia has required crypto exchanges to register with AUSTRAC, the country's financial intelligence agency, for anti-money-laundering purposes since 2018. That registration requirement, however, did not impose the broader consumer protection obligations that govern licensed financial service providers. The collapse of offshore platforms including FTX, which carried significant Australian customer exposure, brought the gap into sharp focus. Mulino cited cases where "operators pooled and held client assets" without adequate protections as a direct catalyst for the legislation.
The penalties for non-compliance are structured to scale with business size: a flat AU$16.5 million minimum, or three times the financial benefit obtained from the breach, or 10 percent of annual turnover, whichever is greater.
Coinbase and CloudTech Group have both welcomed the reforms.
Tom Matthews, head of corporate affairs at Australian exchange Swyftx, framed the need plainly: "Australia needs rules that are good enough for our industry to support national productivity."
The government projects AU$24 billion in potential annual productivity gains from broader digital finance adoption, according to figures cited by the Digital Finance CRC and referenced in the Treasury's release.
Mulino acknowledged the limits of rigid rulemaking, noting that "rigid rules could leave gaps or stifle new businesses," which is why the framework is designed with regulatory flexibility in mind.
Stablecoins and AML Sit Outside This Bill
Stablecoins are deliberately excluded from this legislation and will be addressed under separate reforms to payments and stored-value facilities. Digital Currency Exchange operators have been required to register with AUSTRAC since 2018, and those anti-money-laundering obligations continue under existing law as a distinct requirement from the new AFSL licensing regime. The agency's Travel Rule enforcement for virtual asset transfers, which requires exchanges to pass sender and recipient information along with transactions, is scheduled to begin mid-2026 and operates separately from this bill.
What It Means Beyond Australia
Australia's approach follows a principle that can be characterised as same activity, same risk, same rules, routing crypto oversight through existing financial services law rather than building a parallel crypto-specific regime. This contrasts with Singapore's MAS licensing model, which is crypto-specific, but aligns in spirit with the EU's Markets in Crypto-Assets (MiCA) framework. Offshore platforms serving Australian users, including exchanges operating across South and Southeast Asia, will need to either obtain an AFSL or exit the market.
The framework carries direct relevance for the tokenised real-world asset sector. Projects tokenising commodities, bullion, or real estate that target Australian users now have a defined, ASIC-supervised pathway, which could give Australia a competitive edge in attracting institutional RWA issuance.
For South Asia, India operates a high-tax but licensing-light crypto environment with no formal exchange licensing law. Australia's approach adds indirect pressure on Indian policymakers to formalise custody standards, particularly as Indian exchanges navigate credibility challenges following the WazirX hack.
In Africa, regulators in South Africa, Kenya, and Nigeria have taken meaningful but narrower steps: South Africa's FSCA has licensed crypto asset service providers since late 2023, Kenya passed a Virtual Asset Service Providers Act in 2025, and Nigeria brought stablecoins under SEC oversight through its Investment and Securities Act 2025. Regulatory focus across Africa has largely remained on anti-money-laundering, countering the financing of terrorism, and preventing capital flight rather than on comprehensive licensing, which contextualises why these frameworks are characterised as narrower than Australia's approach. ASIC holds information-sharing agreements with several African regulators, including Kenya, meaning Australia's AFSL-based standards could gradually shape supervisory expectations across the region.
The bill's TCP category is especially relevant for commodity-linked RWA projects active in the Gulf-Asia and sub-Saharan Africa corridors.
What Happens Next
The bill still requires passage through both chambers of parliament. Royal assent is expected in 2026. FATF expanded its list of jurisdictions with "materially important" crypto sectors from 58 to 67 in late 2025, a signal that regulators are expected to treat formal licensing as a baseline for economies with significant crypto activity.
Australia's bill is the most comprehensive licensing framework in the southern hemisphere and one of the more structured in the APAC region. Its AFSL model is well positioned to draw attention from regulators in markets such as Kenya, India, and Nigeria as they weigh their own paths toward formalising crypto oversight.