Australia Proposes Legislation to Regulate Cryptocurrency Platforms

Australia's Senate Economics Legislation Committee has released a report supporting a legislative proposal to incorporate cryptocurrency platforms and custodial services into the country's financial services framework. According to PANews, the proposed legislation aims to amend the Corporations Act and the ASIC Act, establishing a licensing and compliance system for businesses holding or managing digital tokens on behalf of clients. Under the proposed framework, digital asset platforms and tokenized custodial service operators would generally be required to hold an Australian Financial Services License (AFSL), adhere to asset protection standards, and meet disclosure requirements when dealing with retail clients. The legislation seeks to address regulatory gaps by subjecting intermediaries holding clients' digital assets to existing financial services laws, rather than regulating blockchain technology itself. If passed, providers without an AFSL would be granted a six-month transition period.