- Australia’s crypto firms must initially apply for licenses and meet capital rules.
- The government plans to tackle debanking in collaboration with major banks in the country.
- Aligning with global standards, Australia hopes to boost its digital asset sector.
Australia’s Labor-led government has introduced a new regulatory framework for cryptocurrency businesses. This framework, announced by the Treasury Department on March 21, 2025, will bring crypto exchanges, custodians, and brokers under the country’s financial services laws. Under this licensing proposal, these businesses will be required to apply for an Australian Financial Services Licence. Next, they must satisfy capital requirements and uphold consumer asset protection in the same manner as traditional financial institutions.
The move aims to address issues within the sector, including de-banking, where crypto companies struggle to access traditional banking services. The Treasury Department has begun an initiative to foster relationships between banks and crypto businesses. Australia now joins fellow international regulators Singapore and the European Union in this regard.
Addressing Debanking and Strengthening the Sector
Debanking has been a major challenge for Australian cryptocurrency companies. Traditional banks often refuse to offer services to crypto firms, leading to operational difficulties. However, the latest regulations propose a teamwork approach. The Australian Treasury will work closely with the four largest banks in the country to better understand the issues surrounding de-banking in order to find solutions that will enable access to essential banking services for crypto businesses.
While welcoming the reforms, BTC Markets CEO Caroline Bowler said greater clarity was needed on capital adequacy and custody requirements. Bowler stressed the need not to create burdens that would hinder investment in business. Similarly, Jonathon Miller, managing director of Kraken Australia, called for more tailored crypto legislation. He stated that clear crypto regulations would help remove obstacles to business growth and mitigate de-banking challenges.
Related: Australian AFP Investigates Massive Binance Crypto Scam
Global Competitiveness and Political Landscape
The changes to the regulations came before the Federal elections poised for May 17, 2025. Meanwhile, both major political parties, namely the Labor Party and the opposition Coalition, have somehow stood for the regulation of digital assets. Current poll results indicate a very close contest for the two parties, which makes clear policies about the future of cryptocurrency in Australia extremely important.
By aligning with international standards, the Australian government hopes to boost the global competitiveness of its digital asset sector. This paradigm of integrating crypto into the financial sector is expected to spur innovation while maintaining consumer protections. This clarity would also open avenues for banks to start offering products and services for this booming crypto market.
