Consulting on regulating digital asset platforms and tokenised custody platforms – new financial products, new obligations, and opportunities for tokenisation

On 25 September 2025, Commonwealth Treasury commenced consultation on proposals to regulate digital asset platforms and tokenised custody platforms within Australia's financial services regulatory framework.

The proposed amendments draw upon the principle of ‘same activity, same risk, same regulation’. If passed in their current form, these would adapt Australia's existing financial regulatory framework to capture many in the digital asset sector, providing long awaited clarity and certainty to the industry. It would also set out a framework for issuance of digital twin style tokens, providing a clear pathway for tokenisation of real-world assets, including traditional financial products.

Summary

The proposed amendments to the Corporations Act 2001 (Cth) (Corporations Act) are set out in the Exposure Draft Bill Treasury Laws Amendment Bill 2025: Digital asset, and tokenised custody, platforms (Exposure Draft) and propose to (amongst other things):

1. introduce new financial products of digital asset platforms (DAPs) (which will likely include digital asset custody service providers) and tokenised custody platforms (TCPs) (which facilitate tokenisation of existing assets);
2. impose tailored financial services licensing and conduct obligations on operators of these platforms, including with respect to disclosure, fundraising, minimum standards for asset holding and transactional and settlement functions, and ASIC's powers;
3. provide new ministerial powers; and
4. exempt certain activities from regulation, including in relation to activities which pose minimum risk, operating public, permissionless ledgers and certain aspects of arrangements for staking and wrapped tokens.

What does this mean?

If passed, these would apply in addition to existing obligations under Chapter 7 of the Corporations Act, subject to a few new exemptions. These proposals will likely impact every person providing services in relation to digital assets and distributed ledger technology, as well as those in traditional financial services and markets who may engage with providers in this space, or the underlying technology. Further detail of these reforms, including who is likely to be captured, is set out below.

Treasury is actively consulting on these proposals until 24 October 2025. If you would like to discuss this at any time, we would be delighted to do so.

Other reforms

These reforms are not happening in a vacuum. On 9 October 2025, Treasury released a separate consultation on Exposure Draft Treasury Laws Amendment Bill 2025: Payments System Modernisation— amendment of the Corporations Act 2001. This includes a proposal to regulate tokenised stored value facilities as a financial product. This does not propose to regulate the 'stablecoin' token under the stored value facility financial product. Rather, if passed, it would bring the facility through which stablecoins are issued and redeemed (but not the token) into our regulatory perimeter. Further detail regarding these reforms is set out in our alert here.

Regulating digital asset platforms – more detail

The Exposure Draft provides an in-depth proposal to bring intermediaries in the digital asset sector within scope of our financial services framework.

New financial products and definitions

To bring certain digital asset service providers into the regulatory framework, the Exposure Draft proposes to:

• (financial products) introduce 2 new financial products being digital asset platforms (DAPs); and tokenised custody platforms (TCPs);
• (licensing) require those providing financial services in relation to TCPs and DAPs to hold an Australian financial services licence (AFSL) and comply with the general obligations which apply to AFSL holders.

The following table sets out who is intended to be captured as part of the new financial products.

Licensing obligations

The proposals in the Exposure Draft are designed to tailor obligations under Australia's existing financial services regime regarding licensing and conduct to those providing financial services in relation to TCPs and DAPs, subject to additional standards and exemptions from certain obligations. This is intended to reflect the specific risks and functions of these products, and leverage the existing established concepts in financial services regulation.

The tailored obligations include:

• (minimum standards) to meet the following standards to be set by ASIC:
  • minimum standards for asst holding for safeguarding of client assets; and
  • transaction and settlement standards which are intended to establish minimum requirements for how client transactions are executed and settled for these platforms and transactional and settlement functions set by ASIC;
• (platform rules) to have platform rules to ensure that clients understand that the terms on which they can access and use the service, and who bears key risks during execution and settlement. Much like the rules for the operation of a market, the platform rules form a contract between the issuer and each client, and each client another client they have dealings with under the platform.

Tailored disclosure

The Exposure Draft proposes to tailor disclosure requirements for DAP and TCP by requiring:

• the issuer prepares and provide a DAP or TCP Guide (similar to an IDPS Guide) before it is issued to a retail client. This must include all information that a person reasonably requires to make a decision, as a retail client, whether to become a client of the platform, and be written in a clear, concise and effective manner;

• the operator of a DAP or TCP prepare a platform voting policy which sets out the exercise of any voting rights or governance rights arising for the platforms underlying asset;

• a financial services guide (FSG) be provided; and

• compliance with design and distribution obligations, including to make a target market determination (TMD).

This is intended to reflect the specific risks and functions of these products, and leverage the existing established concepts in financial services regulation.

New powers

These proposals are designed to be flexible and adapt to changes in the nature of assets, how they are made available, emerging financial stability risks and investor protection concerns which may arise.

To account for this, the Exposure Draft proposed to give the Minister power to make the following declarations:

1. declare that a digital asset platform is a financial market or clearing and settlement facility under the Corporations Act if:
   a. the facility would be a financial market or clearing and settlement facility in relation to one or more classes of digital tokens, if those tokens were financial products; and
   b. the facility is operated by, or on behalf of, a constitutionally-covered corporation;
2. declare that a facility that otherwise constitutes a digital asset platform or tokenised custody platform is not a financial market or clearing and settlement facility under the Corproations Act in relation to one or more specified financial products; and
3. conduct that involved a specified financial product is prohibited through the platform.

With respect to clearing and settlement facilities and financial markets, these reflect that in some circumstances, there is a risk that a DAP or TCP may be a clearing and settlement facility, or a financial market.

Transitional arrangements

A responsible person has 6 months following commencement to apply to ASIC to grant an AFSL or vary the conditions of an AFSL. Once lodged within this period, the amendments do not apply until the earliest of:

• when AISC makes a decision in relation to this;

OR

• 1 year following commencement, or such later date as determined by the Minister.

Exemptions

To facilitate this, the proposals also introduce the following exemptions which are intended to provide greater certainty about the effect and application of the financial services law:

• exempting dealing in a DAP or TCP and possessing digital tokens, or holding assets or digital tokens under the platform from providing a custodial or depository service;

• clarifying how wrapped tokens are to be treated (and provide that certain wrapped tokens may be exempt from the application of these laws);

• exempting AFSL holders from fundraising, disclosure and anti-hawking obligations when providing financial services with respect to DAPs and TCPs;

• introducing the following minimal risk exemptions for the issuer from holding an AFSL:
  • if the total market value of transactions across all its platforms does not exceed $10 million across a rolling 12-month period; or
  • to arrange for a person to use a DAP or TCP or give that person advice about the DAP or TCP's existence in the ordinary course of an otherwise primarily non-financial services business; and

• exempting public digital token infrastructure and intermediated staking arrangements from certain regulation under the financial services law.

These reforms are designed to mitigate the risks and harms associated with custodial arrangements in the digital asset space and the reliance consumers place on different types of intermediaries in this sector. In applying the principal of 'same risk same regulation', the proposals draw on regulation of similar activities such as custodians, managed investment schemes, investor-directed portfolio services (IDPS), financial markets and clearing and settlement facilities.

Who will this apply to?

These proposals will likely impact every person providing services in relation to digital assets and distributed ledger technology, as well as those in traditional financial services and markets who may engage with providers in this space, or the underlying technology.

In particular, the following persons may be impacted by these proposals:

• digital token exchanges;

• brokers who buy and sell digital tokens on behalf of clients;

• market makers who buy or sell digital tokens to clients from their own stockpiles;

• wallet and custody service providers who store and safeguard digital tokens on behalf of clients; and

• operators who contribute to the maintenance of a public network and share rewards with clients;

• those seeking to 'tokenise' assets, whether they are physical assets or intangible assets (including financial products);

• the operator of a bridging or wrapping facility who creates new tokens on a different network;

• operators of distributed ledger infrastructure;

• financial markets and operators of clearing and settlement facilities;

• those seeking to provide advice in relation to any of the above;

As such, we recommend all who currently or are looking to undertake activities connected to digital assets (including tokenised traditional assets), engage with these reforms.