- A key Australian senate committee endorsed a bill that would require cryptocurrency exchanges and tokenization platforms to obtain a financial services license.
- The proposed framework aims to close oversight gaps by mandating stricter custody, disclosure, and conduct rules for platforms holding customer assets.
- Industry stakeholders warned the bill’s broad definitions could inadvertently regulate wallet software providers and highlighted ongoing debanking issues.
- With the committee’s backing, the legislation now advances to the full Senate for a final vote, bringing Australia closer to its first bespoke crypto licensing regime.
Australia’s Senate Economics Legislation Committee has recommended passing a digital assets licensing bill on March 16, moving the country closer to a new regulatory era. This move seeks to bring centralized exchanges and custodians under the existing financial services regime.
Consequently, most platforms holding client assets would need an Australian Financial Services Licence. Licensed entities must then comply with ASIC-set custody standards and specific disclosure rules for retail clients.
However, the bill includes exemptions for small providers with annual transactions under $7 million. Some public blockchain infrastructure providers are also exempt from the new requirements.
Meanwhile, industry groups like law firm Piper Alderman warned the bill’s definitions are overly broad. They cautioned that wallet software and certain security setups could be unintentionally captured.
Ripple Labs agreed regulation should focus on control but urged clearer definitions for modern custody. The firm argued providers holding just one key shard in a multi-party setup should not be classified as custodians.
Coinbase Australia’s director, John O’Loghlen, welcomed the legislative progress in a statement. He called it “an important step for Australia’s standing in the global digital economy.”
O’Loghlen also highlighted the persistent risk of debanking for crypto businesses. He urged the government to prioritize implementing past recommendations to address this anti-competitive practice.
The committee acknowledged industry concerns but sided with using future regulations for fine-tuning. The bill now proceeds to the Senate for debate and a final vote.
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