BREAKING: Australian Lawmakers Back Landmark Bill Requiring Crypto Platforms to Obtain Financial Services Licenses

Australian lawmakers have backed a landmark bill that would mandate centralized cryptocurrency exchanges and custodial platforms to obtain Australian Financial Services Licenses (AFSL), a move set to bring the sector under formal financial regulation. The Senate Economics Legislation Committee concluded the proposed framework achieves a 'workable balance' between fostering innovation and protecting investors, addressing long-standing regulatory challenges in the digital asset space.

Lawmakers place crypto platforms under financial licensing oversight

The proposed framework focuses on companies that control digital assets for customers rather than on regulating blockchain technology itself. Under the bill, operators of digital-asset platforms and tokenized custody services would generally need to hold an Australian Financial Services Licence. 

In addition, the proposal would provide formal definitions of concepts such as “digital tokens.” Licensed platforms would also have to comply with new standards to protect client funds. These include requirements for safeguarding digital assets, transparency about fees and operational risks, and clear disclosure practices during customer onboarding.

Australian policymakers have emphasized that they do not want to blunt the development of blockchain, but rather offer more transparent guidance to enterprises operating in the digital asset market. Thus, the bill is aimed at market behavior, rather than technology.

Through the control of intermediaries, legislators seek to mitigate risks caused by a failure of custody or malpractice in operations or a lack of disclosure.

In addition, the legislation would make certain exemptions for smaller operators. Platforms that handle less than 5,000 Australian dollars per customer and process under $10 million in annual transactions could qualify for regulatory relief.

Australia expands its broader regulatory strategy for digital assets

The proposed legislation builds on earlier efforts by Australian regulators to integrate crypto businesses into the country’s financial regulatory framework. Before operating legally, digital currency exchanges must be registered with the Australian Transaction Reports and Analysis Centre (AUSTRAC). Its key requirement concerns anti-money laundering compliance and the monitoring of financial crimes.

The new bill would, however, extend the area of regulation beyond registration to encompass a more comprehensive licensing and conduct process. The Treasury introduced the measure in November 2025 and had it read a third time in the House of Representatives on February 4, but it was sent to the Senate for further discussion. 

This news comes as Ripple, a crypto company, announced that it is set to license a major financial services license in Australia by acquiring a local payments firm. In a recent press release issued, Ripple announced it would acquire an entity within the European Banking Circle Group, BC Payments Australia.

The acquisition will grant Ripple the Australian Financial Services License (AFSL) of the company, which will likely be required to provide financial services to some crypto firms operating in the country.

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