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Australia is poised for a significant regulatory shift in 2026 as the government moves to integrate digital asset and tokenised custody platforms into the existing financial services framework.
Throughout 2025, the Treasury and the Australian Securities and Investments Commission (ASIC) have undertaken reforms to close regulatory gaps, clarify financial services law and strengthen consumer safeguards in the fast-growing digital asset market.
The release of the Treasury Laws Amendment (Regulating Digital Asset and Tokenised Custody Platforms) Bill 2025 on September 24, 2025 marked a pivotal step. The draft legislation proposes amendments to the Corporations Act 2001 to bring digital asset platforms and tokenised custody platforms within the scope of financial products.
This reflects the government’s commitment to modernise Australia’s digital asset regime while maintaining technology neutrality and aligning with international regulatory principles. For payments and digital asset service providers, the shift is likely to affect compliance costs, licensing obligations and competitive positioning, as operators adjust to a more formalised supervisory environment.
As one of the most influential regulatory jurisdictions in Asia-Pacific, Australia’s approach is often viewed as a bellwether for neighbouring markets and a testing ground for principles under consideration in the UK, EU and US.
The reforms therefore have implications not only domestically but also for firms operating across the region and globe.
Closing regulatory gaps and formalising oversight
The proposed framework brings digital asset and tokenised custody platforms within the existing financial services licensing perimeter, requiring operators to hold an Australian Financial Services (AFS) licence and comply with core obligations such as acting efficiently, honestly and fairly, managing conflicts of interest and maintaining adequate resources.
ASIC would gain powers to set consistent asset-holding, transaction and settlement standards, and platforms would need to establish rules covering client eligibility, settlement processes, liquidity sources and asset redemption.
The reforms also introduce clearer definitions for terms such as “digital token” and “digital asset platform”, aligning with international practice. The focus on custodial and operational risk reflects past failures linked to weak asset segregation and governance.
To ensure proportionality, some platforms may be excluded from managed investment scheme treatment where clients retain direct redemption rights and operators act only on client instructions.
Transition pathway and international alignment
ASIC complemented Treasury’s draft legislation with a series of consultations in late 2025, including proposals to extend class relief for stablecoins, introduce targeted exemptions and update custody rules for distributors of stablecoin and wrapped token products.
These measures support a smooth transition to the new regime and reflect the government’s adoption of Financial Stability Board (FSB) and International Organization of Securities Commissions (IOSCO) recommendations grounded in the principle of “same activity, same risk, same regulation”.
Positioning Australia for 2026
The 2025 legislative and regulatory developments have established the foundations of a comprehensive, internationally consistent regulatory regime.
By embedding digital asset custody and platform services within the established financial services framework, Australia is preparing for full implementation in 2026 and positioning itself as a leading jurisdiction in Asia-Pacific for regulated digital asset activity.
Clearer licensing pathways may attract global digital asset and custody providers seeking regulatory certainty, although increased compliance obligations could deter smaller or less-capitalised firms.
During 2026, firms should assess whether product offerings will fall within the expanded financial product perimeter, map potential licensing obligations and review processes against anticipated ASIC standards.
Firms that act early will be best positioned to minimise transition risks, capture institutional demand and compete in an increasingly regulated and internationally aligned Australian digital asset market.
