On 25 September 2025, the Australian Government opened a consultation on draft legislation to regulate digital asset platforms and tokenised custody platforms by introducing each as new financial products.

The draft legislation seeks to implement the Australian Government’s commitment in the 2024-2025 Budget to modernise Australia’s digital asset regulations. The proposals would address the current regulatory gaps and uncertainty when dealing with digital assets and the infrastructure and arrangements that support them in the context of Australia’s financial regulatory framework.

The proposed framework is designed to align with peer jurisdictions like the European Union and United Kingdom. It targets the same activities using Australian domestic concepts of ‘financial product’ and ‘financial service’– making only minor changes to how those existing laws would apply. This is consistent with the ‘same risk, same regulation’ approach used in other jurisdictions.

The term “digital asset” is not currently used or defined in Australia’s financial services laws, despite those laws applying to digital assets in the same way as any other asset. The draft legislation will also avoid using or defining the concept of digital asset. As such:

• New and existing references to “asset” within the financial services laws will continue to cover bundles of rights, including rights that are legally recognised as being held by a person who in fact possesses a digital token.
• New references to “digital tokens” within the financial services laws signify that a provision is ambivalent to the type or class of asset being held by a person who in fact possesses a digital token.

The existing financial services laws will continue to be used to determine whether an arrangement (such as a contractual agreement) is a financial product. In the context of digital assets, this may mean identifying whether a person who in fact possesses a digital token is legally recognised as the “holder” of a financial product.

The draft legislation introduces two new financial products within the Corporations Act 2001 – digital asset platform and tokenised custody platform. Existing consumer protections and licensing rules will generally apply. Providers of the new financial products will be required to hold an Australian Financial Services Licence, they will be subject to both the existing obligations of the license and targeted obligations.

Platforms holding less than $5,000 per customer and facilitating less than $10 million in transactions per year will be exempt.

The deadline for comments on the draft legislation is 24 October 2025.