Overview of Cryptocurrency Asset Regulation Series (8): Australia, From AUSTRAC Registration to Digital Asset Platform Licensing

On April 8, 2026, the Australian "2026 Companies Act Amendment (Digital Asset Framework)" was granted royal assent. The new law brings digital asset platforms and tokenized custody platforms under financial product regulation and will take effect on April 8, 2027. Meanwhile, AUSTRAC has expanded the anti-money laundering scope for virtual asset service providers, and the ASIC's no-action period for existing financial services licenses will end on June 30, 2026. As a result, the Australian market enters a rare dual-track period: businesses must comply with the rules currently in effect while preparing for the new platform licenses next year.

Australia's regulatory structure does not assign cryptocurrency assets to a single authority. ASIC is responsible for financial products, market conduct, and platform licensing; AUSTRAC handles anti-money laundering and counter-terrorism financing; APRA focuses on the prudential risks of banks and large value storage institutions; RBA oversees payment systems and settlement policies; and the ATO manages asset disposal and income records. Determining what licenses a project needs starts with what assets it controls, for whom it holds them, how transactions are completed, and whether payment functions are provided.

Figure 1｜Regulatory Bodies and Main Responsibilities for Digital Assets in Australia

▌ 1. First Look at Assets, Then at What the Platform Does

Before the new law takes effect, ASIC continues to determine whether each type of token and service constitutes a financial product under the "2001 Companies Act." Tokens may fall under managed investment schemes, derivatives, non-cash payment instruments, or securities; if a platform facilitates financial product transactions, it may also constitute a financial market. Stablecoins that allow users to pay others through balances may be considered non-cash payment facilities; packaged tokens tied to the prices of other assets may also fall under derivative rules.

This classification directly triggers the Australian Financial Services Licence (AFSL). Issuing financial products, providing advice, facilitating transactions, custodial services for client assets, or operating related facilities correspond to different authorizations and ongoing obligations. If a financial product appears on a platform, the trading function may enter discussions about financial market licensing. Businesses cannot simply determine their regulatory identity based on self-labels like "exchange," "wallet," or "Web3 project."

The new law attempts to establish a unified entry point for many previously hard-to-classify platforms. Section 761GB of the Companies Act defines digital tokens based on "factual control": an electronic record that can be transferred by one or more persons, excluding others' control and proving their control ability, may fall under this definition. It focuses on whether users and platforms can actually control the assets, regardless of a specific blockchain or cryptographic structure.

On this basis, Section 761GC defines digital asset platforms (Digital Asset Platform, DAP): operators hold digital tokens on behalf of clients. Section 761GD defines tokenized custody platforms (Tokenised Custody Platform, TCP): each real asset or non-monetary asset corresponds to a digital token that can be redeemed or delivered. The former covers common centralized trading and custody services, while the latter provides a dedicated entry for real asset tokenization.

Figure 2｜Pathway from Asset Classification to Licensing Combinations

▌ 2. DAP and TCP Will Become Financial Products

Figure 3｜Three Sets of Minimum Standards for DAP and TCP Platforms

The new law lists DAP and TCP as financial products in Section 764A(1)(la) and (lb) of the Companies Act, excluding situations already regulated under managed investment schemes and other categories. Operators are generally required to obtain an AFSL and obtain authorizations that match the platform. Platform rules, information disclosure, client assets, and transaction processes will all fall under the financial services law framework.

This change expands the regulatory focus from individual tokens to platform services. Many spot tokens may not belong to traditional securities or derivatives, but when platforms control them for clients, record rights, and arrange transactions, the operational risks faced by clients are highly similar. Loss of private keys, internal ledger errors, misappropriation of assets, or settlement failures all occur at the platform level. Therefore, Australia chooses to directly regulate holding and transaction arrangements.

Section 912BB requires relevant licensees to comply with asset holding standards and transaction and settlement standards. According to newly added Section 912BE, ASIC can stipulate how client assets should be held, isolated, recorded, reconciled, reported, and used. Platforms can use integrated wallets to store multiple clients' assets, but internal ledgers must continuously identify each client's rights. When only one address is displayed on-chain, the platform's own sub-account records become key evidence of client asset ownership.

New Section 912BF allows ASIC to establish transaction and settlement standards, covering asset acquisition, disposal, encumbrance, and final settlement, as well as order processing, agency and subcontracting, market-making or liquidity provision agreements, and their monitoring. Platforms will need to demonstrate that transactions can be completed in the future and explain how orders enter the system, who can intervene, what permissions external market makers have, and how abnormal transactions are identified and handled.

Section 912BG further requires platform rules to specify client qualifications, mutual obligations, settlement methods, external liquidity, risks, asset lists, and redemption or delivery arrangements. The rules have contractual effect between licensees and clients. User agreements are no longer just website terms; they must also align with the platform's actual on-chain control, internal ledgers, and settlement systems.

▌ 3. Small Scale Exemption Draws a Very Narrow Boundary

The new law retains the small-scale DAP exemption. Section 911A(2)(ja) of the Companies Act applies to platforms that do not offer other financial products, have a total trading volume not exceeding AUD 10 million in the past 12 months, and where each client's entry value does not exceed AUD 5,000. Operators also need to notify ASIC.

This exemption is more suitable for limited trials or small services and is difficult to support a trading platform aimed at the general public. The total and individual client limits will quickly trigger as the business grows, and platforms must continuously monitor whether they remain within the boundary. If product design includes income, leverage, derivatives, or payment functions, it may also leave the exemption scope due to the emergence of other financial products.

For startups, a reasonable path is to first determine the trial scale and client limits, then decide whether to use the exemption, collaborate with licensed institutions, or directly prepare for AFSL applications. Treating obtaining a license after going live as a default arrangement is increasingly difficult to adapt to ASIC's current enforcement attitude. The no-action period under current rules ends on June 30, 2026, and businesses that now constitute financial products or financial services must address licensing issues immediately.

▌ 4. AUSTRAC Registration Addresses Another Risk Line

AFSL focuses on financial services and client assets, while AUSTRAC registration focuses on whether funds are used for money laundering, terrorist financing, and sanctions evasion. Both can apply simultaneously to the same business. Starting March 31, 2026, Australia's updated anti-money laundering and counter-terrorism financing rules expanded the scope of virtual asset services to include not only fiat-to-crypto exchanges but also crypto-to-crypto exchanges, transferring virtual assets on behalf of clients, custody or management, and participating in virtual asset issuance or sales-related financial services.

Businesses falling within this scope need to register with AUSTRAC as virtual asset service providers, establish anti-money laundering and counter-terrorism financing programs, complete customer due diligence, monitor transactions, and submit reports on suspicious matters. Inter-agency transfers must also handle the "travel rule," which involves transmitting specified information about the payer and payee along with the transfer. Registration reviews may last up to 90 days, and businesses need to factor in preparation and inquiry time when planning their launch dates.

AUSTRAC will review business ownership, key personnel, product processes, target customers, sources of funds, and technical controls. Registration is not a simple web registration. Platforms need to explain how clients enter, how wallet addresses are verified, how high-risk areas and privacy coins are handled, and how on-chain alerts connect with client accounts. Transaction monitoring service providers can provide address risk data, but the ultimate rules, investigations, and reporting responsibilities still rest with the registered business.

For overseas platforms, whether they provide services in Australia, whether they have local clients, and whether they have operational connections will affect registration and licensing judgments. Simply having servers or companies located overseas does not resolve compliance issues for Australian clients. Marketing, AUD deposits, local personnel, and customer support will all become factual materials for regulatory authorities to assess business connections.

▌ 5. Stablecoins Will Enter Both Payment and Prudential Regulation

Stablecoin businesses often span the two sets of systems mentioned above. Issuance and redemption may constitute non-cash payment facilities, client wallets and transfers trigger AUSTRAC obligations, and reserve management involves banking, custody, and asset isolation. The Australian Treasury is advancing payment licensing reforms, planning to bring more payment service providers under AFSL and establish regulatory powers for large value storage facilities and designated payment service providers.

APRA's focus is on the financial safety of large value storage institutions, including stablecoin issuers that are denominated in AUD and widely used for payments. Once a certain scale is reached, reserve quality, capital, liquidity, and redemption capacity will enter prudential regulation. RBA, on the other hand, addresses tokenized currencies from the perspective of payment system efficiency and financial stability, continuing to study wholesale settlement arrangements. RBA currently believes that Australia lacks a clear public interest basis for launching a retail central bank digital currency, with policy resources more focused on wholesale and payment infrastructure.

Therefore, an AUD stablecoin project may need to answer four sets of questions simultaneously: whether the token is a financial product, what AFSL authorizations the issuer and wallet need, whether the business has completed AUSTRAC registration, and whether the reserve scale triggers APRA or payment system regulation. If a platform provides both trading and custody, the DAP regime will also cover client assets and settlement processes. The compliance framework should start from products and fund flows, rather than preparing several disconnected sets of documents for different regulatory authorities.

▌ 6. Tax and Client Records Span the Entire Business

The Australian Taxation Office generally views cryptocurrency assets as capital gains tax assets. Individuals selling, exchanging, gifting, or using cryptocurrency to purchase goods may constitute disposal events; income tax rules may also apply when trading or receiving compensation in a business manner. The ATO requires records of transaction dates, AUD values, purposes, counterparties, wallets, and fees, with relevant materials typically retained for five years.

The transaction history held by the platform will directly affect clients' ability to complete tax declarations. If deposits, withdrawals, crypto-to-crypto exchanges, on-chain transfers, and fee records use different time or price bases, users will find it difficult to reconstruct their cost basis. Platforms targeting Australian clients need to incorporate downloadable records, AUD valuations, and account identifications into product design, while also managing the permissions between regulatory reporting and privacy protection.

Client asset rules also require reliable records. On-chain addresses show asset movements, while internal ledgers explain which client, which order, and which fees the movements belong to. The two sets of records connect in daily reconciliations, supporting both ASIC inspections and AUSTRAC investigations and tax proofs. Many of the new system's requirements in Australia will ultimately rely on this traceable data foundation.

▌ 7. How to Arrange Migration Before the 2027 Effective Date

Figure 4｜Timeline for Implementing Australia’s Digital Asset Rules

The "Digital Asset Framework Act" will take effect on April 8, 2027. The newly added Section 10.83 of the Companies Act provides transitional arrangements, with Section 1730 defining the applicable nodes of the new system. Relevant platforms will have a six-month transition period after the effective date to handle licensing and business migration. ASIC has already initiated an 18-month implementation roadmap, which will gradually establish asset holding, transaction and settlement, and financial standards, and update licensing guidelines.

Existing businesses can first complete a three-layer inventory. The first layer is assets: determine whether each token already constitutes a financial product. The second layer is activities: map out the processes of client deposits, exchanges, custody, transfers, staking, lending, and redemptions, marking who has control at each step. The third layer is entities: confirm which Australian or overseas companies are signing contracts, holding assets, operating technology, and bearing client responsibilities. After completing these three layers, the boundaries for AFSL authorizations, AUSTRAC registrations, and future DAP/TCP applications will become clear.

The migration period will also need to address contracts and technology. Platform rules must be capable of becoming legally binding client arrangements, custody contracts must support isolation and timely retrieval, and integrated wallets must have reliable sub-account ledgers, with permissions for market makers and subcontractors also recorded. If businesses wait until ASIC publishes all detailed regulations to start, the licensing materials, system modifications, and client migrations may very likely overlap in the same timeframe.

▌ 8. Author's Note

Australia's path reflects a strong platform regulatory approach. Regulatory authorities have not attempted to pre-label every type of token with a permanent tag but focus on three aspects: control of client assets, transaction arrangements, and redemption rights. Once DAP and TCP become financial products, even if the underlying tokens themselves do not belong to securities, the platforms responsible for custody and trading must meet unified minimum standards.

The actual impact of this system on businesses is that AFSL and AUSTRAC registrations will run in parallel for the long term. The former addresses who can provide financial services, how to safeguard and settle, while the latter addresses who the clients are, where the funds come from, and how to report abnormal transactions. Stablecoins and tokenized real assets will also bring payment, prudential, and tax regulations into the fold.

The new licenses in 2027 are not the starting point of Australian regulation. Current financial product rules and anti-money laundering requirements have already begun to be enforced, and the coming year is a window to migrate old classifications to the new platform framework. Businesses that can connect on-chain control, internal ledgers, client contracts, and regulatory reports into a single line will find it easier to complete this transition.

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