Australia’s new crypto regulations aim for growth & protection

On Friday, 21 March, the Australian government announced plans to introduce new regulations for digital assets and payment stablecoins. The proposed framework is designed to enhance transparency, protect consumers, and ensure Australia remains globally competitive. Built on the existing Australian financial services framework, these reforms provide strong oversight without the need for a complete regulatory overhaul.

BTC Markets CEO Caroline Bowler welcomed the announcement, stating:

"It is a pragmatic, grounded statement. The areas of reform are sensible and would keep Australia competitive with our global peers. We appreciate that the suggested standards to be imposed on digital asset providers are common sense, and do not require a re-working of existing regulations. The carve-out of non-financial products and software development should be of relief for those who create and use NFTs – an area where Australia has shown ingenuity and bleeding-edge creativity.

There will be additional detail required, on capital adequacy and custody requirements for example. We need to ensure that these requirements aren’t overly burdensome for business investment in Australia."

The government has confirmed that ASIC and industry stakeholders will be involved in the transition process, with draft legislation expected to be released for consultation in 2025.

Key impacts

1. Regulatory clarity for digital asset platforms (DAPs)

• A new framework will regulate crypto exchanges and custodians, aligning them with traditional financial services regulations.
• These platforms must comply with consumer protection measures, including safeguarding customer assets.
• Small and start-up exchanges may have reduced obligations to encourage innovation.

2. Stablecoin regulation

• Payment stablecoins will be regulated similarly to stored-value facilities (e.g., prepaid cards and e-wallets).
• Providers must comply with financial services obligations, improving consumer confidence and system stability.

3. Addressing de-banking issues

• The government is working with banks and industry to increase transparency and fairness in de-banking decisions.
• Licensing frameworks for crypto firms are expected to reduce banks' perceived risks, making it easier for exchanges and fintechs to access banking services.

4. Enhanced regulatory sandbox for innovation

• A review of the Enhanced Regulatory Sandbox (ERS) in 2025 will provide more opportunities for start-ups to test products without full licensing.

5. Global alignment & tax reporting

• Australia is collaborating with 60+ jurisdictions on the Crypto Asset Reporting Framework (CARF) to combat tax evasion and improve cross-border tax transparency.
• New measures will likely require exchanges to report user transactions to tax authorities.

6. Future work: CBDCs, DeFi, and tokenisation

• Treasury and the RBA are assessing the potential benefits of a wholesale central bank digital currency (CBDC).
• The government and regulators are exploring tokenisation’s role in financial markets.
• DeFi remains under review, with no immediate regulations but ongoing assessments.

The statement represents a balanced approach to crypto regulation, aiming to enhance consumer protection while fostering industry growth and maintaining Australia’s global competitiveness. By building on the existing financial services framework, the government seeks to provide regulatory clarity without placing undue burden on businesses.

While key details, such as capital adequacy and custody requirements, still need to be refined, this bill marks a significant step toward a more structured and transparent digital asset industry. The consultation period in 2025 will be a critical opportunity to shape the final framework, and BTC Markets is committed to working alongside policymakers and industry stakeholders to ensure a strong and sustainable future for crypto in Australia.

Source: Statement of developing an innovative Australian digital asset industry

https://treasury.gov.au/publication/p2025-628504 

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