Market recap – Recent key developments in Australian Digital Assets regulation

Australia’s digital assets sector has undergone several major regulatory developments in recent months.  Below is a high-level chronological recap of the key consultations, legislative proposals, and updates shaping the industry’s landscape during this period.

Treasury consults on exposure draft legislation regulating digital asset platforms

On 25 September 2025, Treasury opened consultation on draft legislation to expand Australia’s existing financial services framework in Chapter 7 of the Corporations Act 2001 (Cth). The proposed law:

• specifically captures certain custody arrangements in relation to digital assets as “digital asset platform” and “tokenised custody platform” financial products
• expressly excludes other core blockchain activities from regulatory requirements, such as participating in consensus mechanisms, providing access to staking mechanisms as a service and certain wrapped token arrangements.

The consultation period lasted four weeks and closed on 24 October 2025. Gadens was pleased to collaborate with FinTech Australia members to develop submissions on this consultation.

Treasury consults on Tranche 1a draft legislation regulating payment service providers

On 9 October 2025, Treasury opened a separate consultation on the first tranche of a proposed draft law package designed to substantially reform regulation of payment service providers operating in Australia.

The first tranche of the draft law introduces a new financial product category which would capture certain stablecoins as “tokenised stored value facilities”, however details of key conduct obligations that will apply in relation to these financial products (such as asset safeguarding requirements) are expected to be announced in the next tranche of draft materials. Submissions on the consultation for the first tranche of these reforms closed on 6 November 2025, following a four week consultation window.

Updates to ASIC INFO 225, transitional relief and class exemptions for digital assets

On 29 October 2025, ASIC announced that it had:

• released an updated ASIC Information Sheet 225 Digital assets: Financial Products and Services (INFO 225), clarifying ASIC’s views on how existing Chapter 7 financial services law applies to certain digital assets and arrangements involving digital assets. Industry responses have varied, with some stakeholders expressing concern about the strict legal interpretation and its practical impacts
• issued a class no-action letter, providing transitional runway for digital asset businesses captured by ASIC’s views in updated INFO 225 to apply for a relevant Australian financial services licence, Australian market licence, and/or Australian CS facility licence by 30 June 2026. The letter outlines ASIC’s current regulatory intent but does not constitute binding legal relief and may be amended or withdrawn at ASIC’s discretion
• published a draft Legislative Instrument for consultation, proposing class relief from licensing and conduct requirements to distributors of certain eligible stablecoins and wrapped tokens, and permitting custody service providers to hold digital assets that are financial products in omnibus accounts under specified conditions. The consultation period closed on 12 November 2025.

Corporations Amendment (Digital Assets Framework) Bill 2025 introduced to Parliament

On 26 November 2025, a substantially reworked version of the draft digital assets custody legislation (see item 1 above) was introduced as the Corporations Amendment (Digital Assets Framework) Bill 2025 (Bill). As of the date of publishing this update, the Bill has progressed to its second reading in the House of Representatives.

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Authored by:

Caroline Ord, Partner
Patrick Simon, Senior Associate