Key takeaways

• The new framework does not displace existing Australian financial services laws under Chapter 7 of the Corporations Act 2001 (Cth) ("Corporations Act"). To the extent a digital asset already falls within existing financial product definitions, the current law will apply in largely the same way as it does now.
• Under the draft legislation, DAP and TCP operators will need to hold an AFSL and comply with relevant obligations applicable to AFSL holders. Treasury says these changes will "unlock the potential for digital assets to grow the innovative capacity of Australia's financial services sector" and notes it will assist global firms to see Australia as a credible, well-regulated hub for digital asset innovation.
• New Ministerial powers are proposed to allow the Minister to deem a facility that is otherwise a DAP to be a financial market or clearing and settlement facility ("CS facility"), and to exempt a facility from being a financial market or a CS facility under the Corporations Act if the facility is otherwise a DAP.
• Consultation on the exposure draft legislation closes on 24 October 2025. Should you have any questions on how these changes will impact your business, please do not hesitate to contact us.

In more detail

Overview and definitions

On 25 September 2025, the Australian Government released the exposure draft of the Treasury Laws Amendment (Regulating Digital Asset, And Tokenised Custody, Platforms) Bill 2025 ("Draft Legislation") and the related explanatory memorandum, consultation questionnaire and fact sheet. The Draft Legislation proposes to amend to the Corporations Act to address the current regulatory gaps and uncertainty when dealing with digital assets and the infrastructure and arrangements that support them in the context of Australia's financial services regulatory framework.

The Draft Legislation amends the Corporations Act to introduce two new types of financial products, DAPs and TCPs. A DAP is a product where an operator holds digital tokens on behalf of clients. The operator may also provide transactional functions in respect of the digital tokens (such as transferring them, buying or selling them, staking them or otherwise using them) at the client's direction. Examples of DAPs include multilateral trading platforms, brokerage platforms, market making platforms, wallet and custody platforms and staking platforms.

Treasury makes clear that DAPs do not include software programs that do not involve an operator taking possession of digital tokens on behalf of a client, such as self-hosted wallet applications or automated market makers.

A TCP is a product where an operator holds underlying assets (of any type) and creates tokens to identify the people who can redeem, or direct the delivery of, those assets. Similarly, the operator may provide transactional functions in relation to the underlying assets.

Examples of TCPs include tokenised physical asset platforms (where the operator holds physical assets such as gold bullion and creates tokens to identify the persons entitled to those assets), tokenised intangible asset platforms (where the operator holds existing intangible assets such as shares or bonds and creates tokens to identify the persons entitled to those assets), and bridging and wrapping platforms (where the operator holds digital tokens on behalf of clients and creates new tokens on a different network or in a different form to identify the persons entitled to the original tokens).

Treasury makes clear that TCPs do not include platforms that tokenise "money" to create stablecoins, as these types of platforms will instead be subject to the separate stored value facility framework as part of the broader payments licensing reforms.

Licensing

Advising on, dealing in, or arranging for others to deal in, DAPs or TCPs will be financial services and will require an AFSL (as well as compliance with the conduct requirements under Chapter 7 of the Corporations Act), subject to any applicable exemptions.

Conduct requirements

Operators of DAPs and TCPs will be required to comply with new minimum standards covering the platform's transaction and settlement functions and the platform's arrangements for holding client assets. These minimum standards are set to be developed by the Australian Securities and Investments Commission.

Disclosure Requirements

Operators of DAPs and TCPs will be required to comply with a tailored disclosure regime. Importantly, clients must receive the same disclosure about the underlying assets they acquire through a DAP or TCP as they would have received if they had acquired those assets directly.

Further, operators must issue a "Platform Guide" covering:

• How the platform handles custody, transfers and client instructions
• The ways in which clients can use their digital tokens on the platform
• The operator's fees and charges
• The risks of using the service (such as operational, liquidity or counterparty risks)
• The reporting and rights available to clients

Treasury has made clear the Platform Guide will replace the need for duplicative product disclosure documentation, and ensures investors get information that is specific to the service they are using.

Financial Markets and Clearing and Settlement Facilities

The Draft Legislation adds Note 2 to the definition of a financial market highlighting that a DAP that is a financial market is not also a financial product. Similarly, it is proposed a Note 2 be added to the definition of a CS facility, clarifying that a DAP that is a CS facility is not also a financial product. The law relating to financial markets or CS facilities in Chapter 7 of the Corporations Act applies in these cases instead of the law relating to financial products. Operators of financial markets are required to hold an Australian market licence, while operators of CS facilities are required to hold CS facility licences subject to the applicable exemptions.

The amendments do not alter the ordinary operation of Chapter 7 of the Corporations Act as it applies in relation to financial markets and CS facilities. However, it is important to note that new Ministerial powers are inserted in Part 7.1 of the Corporations Act in the Draft Legislation to:

• Deem a facility that is otherwise a digital asset platform to be a financial market or clearing and settlement facility under the Act
• Exempt a facility from being a financial market or clearing and settlement facility under the Act if the facility is otherwise a digital asset platform

Consultation on the draft legislation closes on 24 October 2025. Please reach out to us if you have any questions on these developments.