Australia Proposes Laws to Bring Crypto Under Existing Financial Licences

Australia has unveiled draft legislation that would bring crypto exchanges and service providers under the same licensing regime that governs traditional financial institutions. The move marks the country’s most significant step yet toward formal regulation of the digital asset sector.

What the Law Proposes

Under the plan, crypto businesses will be required to obtain an Australian Financial Services Licence (AFSL) in order to operate legally. This includes exchanges, custodians, and other platforms offering crypto-related products and services.

The new framework is designed to ensure greater consumer protection, improve transparency, and align the crypto industry with existing financial laws. It also aims to close regulatory gaps that have previously allowed unlicensed operators to serve Australian customers.

Why It Matters

By using the existing AFSL framework, regulators hope to streamline oversight without creating an entirely new licensing system. This approach could accelerate compliance and provide investors with stronger safeguards against fraud, insolvency, and market manipulation.

For the global crypto industry, the move underscores how governments are increasingly treating digital assets as part of the mainstream financial system rather than a separate, experimental sector.

Industry Response

Reaction within Australia’s crypto community has been mixed. Advocates say the rules will legitimize the industry and help attract institutional investors. Critics argue that applying the same standards as banks and asset managers may be too costly for startups and smaller players, potentially stifling innovation.

One industry group warned that without careful implementation, the regulations could drive smaller operators out of business or push them offshore.

Next Steps

The draft bill will be open for consultation before being debated in Parliament later this year. If passed, the rules could come into effect as early as 2026, giving crypto companies a transition period to comply.

For Australia, the reforms represent a balancing act between protecting consumers and fostering innovation. For the crypto world at large, they signal yet another sign that regulation is no longer on the horizon but already here.