Cryptocurrency Regulation in Australia: What the Law Actually Says in 2026

Key Takeaways

• The Corporations Amendment (Digital Assets Framework) Act 2026 received Royal Assent on 8 April 2026 and commences 9 April 2027. It inserts Digital Asset Platforms and Tokenised Custody Platforms into the financial product list in section 764A(1), bringing the platform layer within Chapter 7 AFSL licensing.
• ASIC's sector-wide no-action position expires on 30 June 2026. Operators must lodge AFSL or AFSL variation applications by that date to remain covered while applications are determined. Miss the deadline and the full civil and criminal penalty regime applies from 1 July 2026.
• AUSTRAC Tranche 2 commences in stages. Reformed obligations for fiat-crypto exchanges commenced on 31 March 2026. From 1 July 2026, crypto-to-crypto exchange, custodial wallets, transfer instructions and ICO facilitation become designated services. The travel rule applies with no de minimis threshold.
• ASIC's enforcement record over 2024 to 2025 is mixed. It won Bit Trade on TMD failures, lost Finder twice on the debenture argument and had Block Earner overturned by the Full Court. The High Court reserved judgment on Block Earner after a 12 March 2026 hearing. The pattern: crypto is property, not money, and fixed-return products may sit outside existing financial product definitions.
• Stablecoins are now regulated as tokenised stored-value facilities. All SVF issuers need an AFSL. APRA prudential supervision is triggered above $200 million in stored value. 100 per cent asset backing in cash or government securities is mandatory.
• Debanking remains unsolved. An AFSL provides regulatory legitimacy but does not oblige any bank to provide banking services. Operators should plan banking arrangements as carefully as compliance.

1. 1.The New Licensing Regime: What the Digital Assets Framework Act Actually Creates
2. 2.AUSTRAC Tranche 2: The Staggered Commencement
3. 3.What the Courts Have Actually Held: The Enforcement Record
4. 4.Stablecoins: The Stored-Value Facility Framework
5. 5.The Overlap Problem: DAP Licensing, MIS Registration and Product Classification
6. 6.Tax: Current Position and Proposed Changes
7. 7.Debanking: The Problem Licensing Cannot Solve
8. 8.Project Acacia: Wholesale CBDC Development
9. 9.International Positioning
10. 10.What This Means Strategically

The regulatory framework for digital assets in Australia changed materially in early 2026. The Corporations Amendment (Digital Assets Framework) Act 2026 received Royal Assent on 8 April 2026, establishing for the first time a dedicated licensing regime for digital asset platforms. The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 has already commenced reforming obligations for fiat-crypto exchanges (from 31 March 2026) and expands AUSTRAC's reach to crypto-to-crypto exchange, custodial wallets and token facilitation from 1 July 2026. A new stored-value facility framework captures stablecoins. And ASIC's enforcement record over the past two years tells a story the regulator itself would prefer not to emphasise: the courts have repeatedly rejected ASIC's characterisation of how existing financial services law applies to digital assets.

This article is not a compliance checklist. It is an analysis of what the law actually provides, where the regulator's stated position departs from what courts have held, and what that means for operators making decisions about Australian market participation. The regulatory landscape in this sector is saturated with misinformation, including from official sources. ASIC's guidance documents represent its enforcement posture, not necessarily the legal position. Courts have said so, more than once.

Need advice on digital asset licensing, AUSTRAC compliance or structuring? Contact Astris Law on (07) 3519 5616.

The New Licensing Regime: What the Digital Assets Framework Act Actually Creates

The Corporations Amendment (Digital Assets Framework) Act 2026 (Cth) (Act No. 38 of 2026) amends Chapter 7 of the Corporations Act 2001 to create two new categories of regulated activity.

A Digital Asset Platform is a facility where an operator holds digital tokens, either for themselves or on behalf of another person. The concept of "holding" is defined by reference to "factual control", which the Act defines as the ability to transfer the token, exclude others from it and demonstrate control over it. This is a deliberately technology-neutral formulation. It captures centralised exchanges, custodial wallet providers and any intermediary that takes possession of client private keys, regardless of the underlying blockchain architecture.

A Tokenised Custody Platform is a facility where an operator identifies and holds assets other than money, issuing a single digital token for each asset, granting the holder the right to redeem or direct delivery of that underlying asset. This captures tokenised securities platforms, tokenised real estate products and similar structures where a digital token represents a claim on a specific real-world asset.

Operating either type of platform without an AFSL authorisation will, from 9 April 2027, constitute unlicensed conduct under section 911A of the Corporations Act. The civil penalty exposure for a body corporate is the greater of 50,000 penalty units, three times the benefit obtained, or 10 per cent of annual turnover capped at 2.5 million penalty units. Criminal liability carries up to 5 years imprisonment for individuals and 6,000 penalty units for corporations. These are not theoretical numbers. ASIC has shown in its recent enforcement actions that it is willing to pursue penalties in the tens of millions against crypto businesses.

The structural mechanism: platforms as financial products

The critical architectural point is this: the Act inserts DAPs and TCPs into the list of financial products in section 764A(1) of the Corporations Act. The platform facility itself is the financial product. This is the same structural approach used for managed investment schemes, where the scheme is the financial product and interests in it are what get issued to investors.

Digital tokens themselves are not reclassified as financial products by this legislation. They remain property. A bitcoin held on a licensed DAP is still just bitcoin. But the platform through which you hold it is now a financial product, and operating that platform is a financial service requiring an AFSL. This distinction is routinely garbled in commentary. When someone tells you "digital assets are now regulated as financial products under the new Act", they are being imprecise in a way that matters. The tokens still need to be independently assessed under existing financial product definitions (managed investment scheme, derivative, debenture, non-cash payment facility) based on the rights and economic substance they confer. The new Act captures the intermediary layer without disturbing the underlying characterisation framework.

One exception worth noting: under section 764A(1)(lb), a TCP is a financial product unless it is also a managed investment scheme, in which case it falls under the existing MIS regime. This avoids double-classification.

What the Act does not regulate

The Act does not regulate the issuance of digital tokens. Multiple top-tier analyses confirm this is a deliberate design choice: primary obligations are directed to platform operators, not issuers merely because they issue a token. You can issue a new token without needing a licence under this Act, provided the token is not independently caught by existing Corporations Act financial product definitions. Pure commodity-like or utility tokens with no counterparty issuer obligations, where the asset consists solely of property rights in the token itself, are not caught either by the new Act or the existing framework.

The Act also does not regulate businesses using digital assets for non-financial purposes, individual holders or traders, or genuinely decentralised protocols with no identifiable operator. The last category is the most contested. "Genuinely decentralised" is a factual determination, not a label that confers immunity. If a team controls protocol upgrades, holds admin keys, takes fees or directs treasury, ASIC and AUSTRAC may treat that team as an operator regardless of how the project describes its governance structure. There is no safe harbour for decentralisation theatre.

How it fits within the existing Chapter 7 architecture

The Act does not create a standalone licensing regime. It grafts digital asset platforms onto the existing AFSL framework within Chapter 7 of the Corporations Act. The consequence is that all existing Chapter 7 obligations apply in full: the general obligation to act efficiently, honestly and fairly under section 912A; design and distribution obligations under Part 7.8A (including the requirement for target market determinations); the product intervention power under Part 7.9A; and the market misconduct provisions of Part 7.10. This is not a light-touch registration. It is full financial services licensing with the same compliance infrastructure as a funds management business.

Operators must prepare and publish platform rules, a platform guide and a platform voting policy. Disclosure obligations require that clients receive the same information about underlying assets acquired through the platform as would be required for a direct acquisition. ASIC will develop minimum standards for asset holding, transaction processing and settlement through subordinate instruments, though these have not yet been finalised.

The transition period and the 30 June 2026 deadline

The Act commences on 9 April 2027, twelve months after Royal Assent. A six-month transition period then runs to approximately October 2027, during which the DAP/TCP amendments do not apply to providers that have applied for but not yet received the relevant AFSL authorisation.

But there is an earlier, more immediately consequential deadline. ASIC's sector-wide no-action position, which has provided enforcement cover to existing digital asset businesses operating without an AFSL, expires on 30 June 2026. To remain covered while an application is determined, operators must lodge an AFSL application (or AFSL variation application) by that date. Operators requiring an Australian Market Licence or Clearing and Settlement facility licence must notify ASIC in writing of their intention to apply and hold a pre-application meeting by 30 June 2026. This applies to both DAP and TCP operators. Miss this deadline and ASIC's prosecutorial forbearance falls away, exposing unlicensed operators to the full civil and criminal penalty regime from 1 July 2026 onward.

This no-action position is not a statutory safe harbour. It is the only bridge between the current unregulated state and the new licensing regime, and it has a hard expiry.

The practical runway is shorter than it appears. AFSL applications routinely take six to twelve months to process, longer for complex applications involving novel business models. Operators that need to restructure custody arrangements, appoint responsible managers with relevant experience, establish compliant dispute resolution systems and arrange professional indemnity insurance should be in active preparation now. Operators that have not yet lodged have weeks, not months.

AUSTRAC Tranche 2: The Staggered Commencement

The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (Cth), which received Royal Assent on 10 December 2024, expands the designated services in Table 1 of section 6 of the AML/CTF Act 2006 to capture a range of digital asset activities that were previously outside AUSTRAC's regulatory perimeter. The commencement is staggered across two dates and the distinction matters.

From 31 March 2026, existing digital currency exchange providers registered with AUSTRAC were automatically re-registered as virtual asset service providers. Reformed AML/CTF program obligations and customer due diligence requirements commenced on that date for Item 50A services, being the exchange of virtual assets for money and vice versa. If you operated a fiat-to-crypto exchange registered with AUSTRAC before the reform, you are already under the new regime. Your registration converted automatically but your compliance obligations expanded. The reformed AML/CTF Rules impose different and in some cases more onerous requirements than the pre-reform rules, including updated customer identification and verification procedures. Enrolment also opened on 31 March 2026 for providers of newly designated services that were not previously registered.

From 1 July 2026, AML/CTF obligations commence for the remaining newly designated virtual asset services. These are the services that had no AUSTRAC registration requirement before the reform:

Exchange of virtual assets for virtual assets (including same-type and cross-type exchange), under Item 50B. Provision of a virtual asset safekeeping service, meaning custodial wallet services (Item 46A). Accepting instructions to transfer virtual assets on behalf of customers, or making transferred virtual assets available to customers (Items 29 and 30). And financial services in connection with the offer or sale of a virtual asset where the business participates in the offer or sale, covering underwriting, market-making, placement and ICO facilitation activities (Item 50C). The travel rule also commences from 1 July 2026. Providers of these newly designated services must register with AUSTRAC by 29 July 2026 (28 days after obligations commence).

The definition of "virtual asset" in the amended Act is a digital representation of value that may be transferred, stored or traded electronically and is not issued by or under the authority of a government body. CBDCs are explicitly excluded.

The travel rule and Australia's zero-threshold approach

Australia implements FATF Recommendation 16 (the travel rule) for virtual asset transfers with no de minimis threshold. This is more onerous than many comparable jurisdictions. Every virtual asset transfer, regardless of value, requires the ordering institution to transmit the payer's full name, tracing information and the payee's full name. For transfers to custodial wallets, a destination tag or memo must be included allowing the beneficiary institution to identify the payer's holdings. The beneficiary institution must obtain this information before making virtual assets available to the customer.

For transfers to self-hosted (non-custodial) wallets, the travel rule does not require information to be transmitted to another business, but the ordering institution must still conduct due diligence to determine whether the destination is custodial or self-hosted. This creates an operational burden that many smaller operators have not yet grappled with.

Scope uncertainties

The legislation does not specifically name Layer 2 bridging or DeFi protocol front-ends. AUSTRAC's published guidance carves out persons who solely provide software applications (such as developers of self-hosted wallet software) but do not engage in safekeeping or administration of virtual assets. However, the statutory language is functional. The "make arrangements for" exchange language in Items 50A and 50B and the transfer instructions language in Items 29 and 30 are broad enough to capture bridge operators that accept instructions to transfer virtual assets on behalf of customers, or that arrange for the exchange of one virtual asset for another. Whether a particular DeFi front-end falls within scope depends on whether the operator exercises control over customer assets, processes orders, or makes arrangements for exchanges. Purely non-custodial protocol interfaces that simply present blockchain data to users likely fall outside. Intermediary front-ends that route, execute or aggregate likely fall within.

AUSTRAC has not issued specific guidance naming either category. This is an area of genuine regulatory uncertainty and operators at the margins should be seeking specific legal advice rather than relying on general commentary.

Penalty exposure

The civil penalty provisions under the AML/CTF Act for non-compliance can reach, for a body corporate, the greater of 100,000 penalty units or three times the benefit obtained. The precedent figures speak for themselves: Commonwealth Bank paid $700 million in 2018 for systemic AML/CTF failures. Westpac paid $1.3 billion in 2020. These were major banks, not crypto startups, but they demonstrate AUSTRAC's appetite for significant penalties where it identifies systemic non-compliance.

Dual compliance

Entities that fall within both the AUSTRAC regime and the ASIC Digital Assets Framework will face dual compliance obligations operating concurrently. An AFSL does not satisfy AUSTRAC requirements and vice versa. The practical consequence is that a centralised exchange serving Australian users will need AUSTRAC registration with a compliant AML/CTF program, an AFSL with a DAP authorisation, target market determinations for products offered, internal and external dispute resolution systems, professional indemnity insurance, and responsible managers with relevant competencies. This compliance cost structure inherently favours larger, well-capitalised operators and will likely accelerate market consolidation.

What the Courts Have Actually Held: The Enforcement Record

The most instructive aspect of Australia's crypto regulatory landscape is not what ASIC says the law means. It is what courts have held the law means when ASIC's interpretations have been tested. In the three major contested enforcement actions over 2024 and 2025, ASIC won one, lost one outright, and had another overturned on appeal with a High Court challenge pending. This is not the record of a regulator whose legal interpretations should be taken at face value.

Bit Trade (Kraken): The one ASIC got right

In Australian Securities and Investments Commission v Bit Trade Pty Ltd [2024] FCA 953, Nicholas J in the Federal Court found that Kraken's margin extension product, which allowed customers to receive credit of up to five times the value of their collateral, constituted a credit facility when denominated in national currency. The breach was not exotic. Bit Trade had simply failed to make a target market determination under section 994B of the Corporations Act before distributing the product. Each distribution to a customer without a TMD was a separate contravention. Over 1,100 Australian customers were affected. Those customers paid over US$7 million in fees and interest and suffered trading losses exceeding US$5 million, including one investor who lost nearly US$4 million.

The penalty was $8 million, delivered in the separate judgment of Australian Securities and Investments Commission v Bit Trade Pty Ltd [2024] FCA 1422 on 12 December 2024. Nicholas J noted that Bit Trade "did not turn its mind to the requirement of the DDO regime until these were first drawn to its attention by ASIC", pointing to what the court described as a seriously deficient compliance system.

But the critical nuance in this decision is frequently overlooked. Nicholas J held that margin extensions repayable in national currency (AUD or USD) constituted a deferred debt and therefore a credit facility. But margin extensions repayable solely in digital assets did not constitute an obligation to repay money and therefore were not a credit facility. The court drew a clear line: crypto is property, not money. Only the fiat-denominated component triggered the financial product characterisation. This distinction matters for every leveraged product in the market.

Block Earner: The one the Full Court overturned

Australian Securities and Investments Commission v Web3 Ventures Pty Ltd [2025] FCAFC 58 is the most significant crypto regulatory decision in Australian law and its outcome at the High Court will determine the regulatory perimeter for an entire class of products.

Block Earner offered a product called "Earner" through which customers lent specified cryptocurrencies to Block Earner in return for a fixed interest rate. ASIC alleged this was a managed investment scheme under section 9 of the Corporations Act, alternatively a financial product constituting a facility for making a financial investment under section 763B, alternatively a derivative under section 761D. The primary judge found a contravention but relieved Block Earner from liability to pay a penalty.

The Full Federal Court (O'Callaghan, Abraham and Button JJ, unanimously) allowed Block Earner's cross-appeal and set aside all findings of contravention.

On the managed investment scheme characterisation, the Full Court held that the Earner product did not satisfy the statutory definition because there was no nexus between customers' contributions and the acquisition of rights to benefits produced by the scheme. Under the Terms of Use, customers simply lent cryptocurrency in return for a fixed interest payment. They had no right to participate in or benefit from Block Earner's deployment of the funds beyond the agreed interest rate. The court drew a fundamental distinction: the generation of a return enabling Block Earner to meet its obligations to users should not be conflated with the generation of a return for users. Fixed return, no investment risk borne by the customer, no managed investment scheme.

On the financial investment characterisation under section 763B, the same reasoning applied. On the derivative characterisation, the Full Court found ASIC's argument that Block Earner's three products (exchange, Earner and Access) should be viewed as a single composite arrangement was untenable.

ASIC was ordered to pay Block Earner's costs.

The High Court granted ASIC special leave to appeal on 4 September 2025 (Matter No. S136/2025) and the hearing occurred on 12 March 2026. Judgment is currently reserved. If the Full Court's reasoning is upheld, fixed-yield crypto products where customers bear no investment risk and receive a predetermined return regardless of the platform's trading performance will sit outside the financial product definitions in the Corporations Act. If ASIC succeeds, a substantial proportion of yield, earn and staking-as-a-service products will require licensing under the existing regime (in addition to the new DAP licensing from 2027).

Finder Wallet: The one ASIC lost twice

In Australian Securities and Investments Commission v Finder Wallet Pty Ltd [2024] FCA 228 and the subsequent appeal in Australian Securities and Investments Commission v Wallet Ventures Pty Ltd [2025] FCAFC 93, ASIC alleged that Finder's "Earn" product was a debenture within the meaning of section 764A of the Corporations Act. Customers converted AUD into TrueAUD (a stablecoin pegged to AUD), allocated it to Finder for a fixed term, and received a fixed return of 4.01 per cent per annum.

ASIC lost at first instance before Markovic J and lost again on appeal before the Full Court (Stewart, Cheeseman and Meagher JJ). The courts held that TrueAUD is not money but a type of property. Customers did not lend or deposit money with Finder. They acquired a property interest in TrueAUD. Because the statutory definition of debenture requires the repayment of "money deposited with or lent to" the issuer, and crypto assets are property rather than money, the product did not fall within the definition.

The interposition of a stablecoin conversion step was the critical structural feature. By having customers first acquire a stablecoin (property) rather than directly depositing AUD (money), the legal character of the relationship shifted from a loan of money to a transfer of property. This is a structuring insight with obvious implications for product design.

BPS Financial (Qoin): Payment tokens are financial products

In Australian Securities and Investments Commission v BPS Financial Pty Ltd [2024] FCA 457 (liability) and [2026] FCA 18 (penalty, 27 January 2026), Downes J found that the Qoin Wallet constituted a non-cash payment facility under section 763D(1) of the Corporations Act. The Qoin token was designed and marketed as a medium of exchange between wallet holders and registered merchants. This brought it squarely within the definition of a facility through which a person makes payments otherwise than by the physical delivery of currency.

The penalty was $14 million: $2 million for unlicensed conduct under section 911A over nearly three years, and $12 million for misleading and deceptive representations about the wallet's functionality and merchant network. The Qoin Wallet was issued more than 93,000 times and BPS received over $40 million from the sale of Qoin tokens.

The principle is straightforward. If your token functions primarily as a payment mechanism between users and merchants, it is a non-cash payment facility and requires an AFSL. This characterisation is unlikely to be disturbed because it accords with the plain statutory language.

The pattern and what it tells you

Three principles emerge from the case law that differ from what you might conclude by reading ASIC's guidance documents alone.

First, crypto assets are property, not money. This has been held consistently across Bit Trade, Finder and related decisions. The consequence is that statutory provisions premised on "money deposited with or lent to" an issuer (debentures), or the provision of "credit" denominated in money (credit facilities), do not capture arrangements denominated solely in digital assets. ASIC's guidance in Information Sheet 225 does not always make this distinction with the clarity the courts have required.

Second, fixed-return products where the customer bears no investment risk are not necessarily managed investment schemes or financial products. The Full Court in Block Earner drew a line between exposing customers to the outcomes of a deployment strategy (which is a managed investment scheme) and simply paying them a fixed return regardless of outcomes (which is a loan). If the High Court upholds this, a significant class of earn and yield products sits outside the existing regulatory perimeter, though they may still be captured by the new DAP framework from 2027 if the platform holds digital tokens on behalf of users.

Third, payment tokens clearly are financial products. The Qoin decision confirms that tokens designed and marketed as payment mechanisms between users and merchants fall within the non-cash payment facility definition. This is the one characterisation where ASIC's stated position and the court's holding are fully aligned.

Stablecoins: The Stored-Value Facility Framework

The Treasury Laws Amendment (Payments System Modernisation) Act 2025 (Cth) introduces a graduated regulatory framework for stablecoins, characterised as tokenised stored-value facilities.

A stored-value facility is defined as a facility where a user transfers funds without immediate payment instructions and retains a right to redeem funds standing to the credit of the facility. A tokenised SVF is a stored-value facility where each right to redeem a particular amount is exercisable only by the person who possesses the digital token attached to that right, and the amount that may be redeemed is fixed and denominated in a single currency.

The regulatory architecture is graduated across three regulators. All SVF providers, including stablecoin issuers, must hold an AFSL and comply with ASIC conduct obligations including disclosure and design and distribution requirements. Where a provider's total stored value exceeds AUD $200 million (calculated across the provider and its related corporate bodies), APRA prudential supervision is triggered in addition to ASIC licensing. APRA's requirements at that threshold approach bank-like prudential standards covering capital adequacy, liquidity and risk management. Below $200 million, the issuer remains ASIC-regulated only. The RBA's role, which previously extended to some "purchased payment facilities" under Part 4 of the Payment Systems (Regulation) Act 1998, has been substantially reduced under the new framework.

The asset-backing requirement provides that issuers must maintain high-quality liquid assets (cash or government securities) equal to at least 100 per cent of outstanding liabilities, held in segregated accounts. This is a hard floor, not a guideline.

ASIC's class no-action position for stablecoin issuers expires on 30 June 2026. After that date, issuers without an AFSL or without meeting the SVF requirements are exposed to enforcement action. The $200 million APRA threshold creates a significant regulatory cliff that issuers approaching that scale need to plan for well in advance of reaching it.

The Overlap Problem: DAP Licensing, MIS Registration and Product Classification

One of the most practically difficult questions under the new regime is what happens when a platform's activities span multiple regulatory categories simultaneously. If a platform provides custodial exchange services (DAP) but also pools customer assets for staking and exercises discretion over deployment strategy (potentially a managed investment scheme under section 601ED of the Corporations Act), does it need both?

The answer, based on ASIC's updated Information Sheet 225 and the architecture of the Digital Assets Framework, is that the two regimes do not subsume each other. The DAP licensing regime covers the operational and custody risks of facilitating client-controlled activities. The MIS regime covers pooled investment management risk where an operator exercises discretion over how pooled assets are deployed. The distinction turns on the operating model. Managed staking, where the operator pools assets and exercises discretion over staking strategy, is likely a managed investment scheme requiring responsible entity registration and a compliant offer under Part 7.9. Intermediated staking, where the platform provides infrastructure for the user to stake their own assets but holds the keys, is a DAP function.

Dual compliance may be required. An entity could simultaneously need MIS requirements for its pooled investment activities and DAP requirements for its custody and exchange functions. The DAP obligations attach to the entity with factual control over the digital tokens, which is often the entity that controls private keys, not necessarily the entity that manages the investment strategy.

This is an area where getting the structure right at the outset is substantially cheaper than restructuring after the fact. The interaction between these two regimes is nuanced and depends entirely on the specifics of the operating model.

Tax: Current Position and Proposed Changes

The ATO treats digital assets as property for tax purposes. Disposal of a crypto asset, including exchange for another crypto asset, triggers a CGT event. The 50 per cent CGT discount applies to assets held for more than 12 months. Personal use exemptions apply narrowly where the original cost is under $10,000 and the asset was acquired for personal consumption rather than investment. Staking rewards, airdrops, DeFi yields and mining income are treated as ordinary income at the point of receipt.

The 2026-27 Federal Budget announced proposed reforms that would eliminate the 50 per cent CGT discount on assets held longer than 12 months and impose a 30 per cent minimum tax on net capital gains, commencing 1 July 2027. These changes would apply to all CGT assets, not just digital assets, and only to gains accrued after 1 July 2027. Legislation has not yet been introduced. The proposals remain just that until a bill passes both Houses and receives Royal Assent. Operators and investors should monitor this but should not restructure on the basis of announcements alone.

Debanking: The Problem Licensing Cannot Solve

Debanking remains the most significant practical barrier for digital asset businesses operating in Australia. Businesses in the sector have reported to Senate inquiries being de-banked up to 91 times. The major banks apply broad risk-appetite exclusions that effectively deny banking services to lawful businesses regardless of their compliance posture.

The Digital Assets Framework is partly intended to address this by providing regulatory legitimacy through licensing. The theory is that a licensed DAP holder should be able to demonstrate to banking partners that it operates within a regulated framework and satisfies AML/CTF obligations. Whether that theory translates to improved banking access in practice is an open question. Banks are not obliged to provide services to any particular customer, and their risk appetite decisions are commercial, not regulatory. A crypto business with an AFSL is still a crypto business, and relationship managers at the major banks have shown limited appetite for the reputational and compliance risk they associate with the sector regardless of licensing status.

There is no specific anti-debanking legislation in force. The issue has been raised repeatedly in parliamentary inquiries and by the Treasurer, but rhetoric has not yet produced a legislative solution. Operators entering or expanding in the Australian market should plan their banking arrangements as carefully as they plan their regulatory compliance.

Project Acacia: Wholesale CBDC Development

The Reserve Bank of Australia, in partnership with the Digital Finance Cooperative Research Centre, is pursuing wholesale CBDC research through Project Acacia. The project has moved into its second phase with 24 industry participants selected for pilot use cases involving real money and real asset transactions across fixed income, private markets, trade receivables and carbon credits. Settlement assets being tested include stablecoins, bank deposit tokens and pilot wholesale CBDC, deployed across multiple DLT platforms including Hedera, Redbelly Network, R3 Corda and EVM-compatible networks.

The RBA's stated position, articulated in a March 2026 speech by the Assistant Governor, is that the question is "no longer whether tokenisation has a future in Australia's financial system, but rather how." The RBA has simultaneously stated it sees no strong case for a retail CBDC. Project Acacia is focused exclusively on wholesale applications: interbank settlement, securities clearing and institutional payment infrastructure.

For operators, this signals that the RBA expects tokenised assets to become a mainstream feature of wholesale financial markets. Infrastructure that positions for interoperability with wholesale CBDC settlement rails may have a structural advantage as this programme matures.

International Positioning

Australia's approach is distinctive in one important respect. It integrates digital asset regulation into the existing AFSL framework under Chapter 7 of the Corporations Act rather than creating a standalone bespoke regime. The EU's Markets in Crypto-Assets Regulation (MiCA) creates separate CASP (Crypto-Asset Service Provider) licence categories. Singapore's Payment Services Act creates specific Major Payment Institution and Standard Payment Institution licence classes with separate Digital Payment Token authorisations. The UK, which currently operates only an FCA registration regime for AML/CTF purposes, is moving toward a more comprehensive framework under the Financial Services and Markets Act 2023 but lags Australia on implementation.

The consequence of Australia's integration approach is that the full weight of Chapter 7 applies from day one: general conduct obligations, design and distribution, product intervention powers, market misconduct provisions. This is a higher compliance burden than a standalone registration regime but it provides regulatory certainty and, in theory, the legitimacy that should assist with banking access and institutional engagement.

There are no mutual recognition provisions between Australia and any other jurisdiction for digital asset licences. A MiCA licence, a Singapore MPI licence, or a UK FCA registration confers no advantage in the Australian licensing process. Each jurisdiction requires its own application from scratch.

What This Means Strategically

The regulatory architecture that emerges from these overlapping regimes creates clear winners and losers.

Well-capitalised operators with existing compliance infrastructure can absorb dual AUSTRAC/ASIC licensing, the cost of responsible managers and dispute resolution, and the operational overhead of the travel rule. The compliance cost acts as a barrier to entry that protects incumbents. Smaller operators and new entrants face a choice between investing heavily in compliance infrastructure or exiting the Australian market.

The characterisation questions that dominated the last three years of enforcement (is this a managed investment scheme? is this a debenture?) will become less commercially significant once the DAP framework commences. From April 2027, most platforms that hold digital tokens on behalf of users will require an AFSL regardless of how their products are characterised under existing financial product definitions. The new regime captures the activity (holding tokens for others) rather than requiring ASIC to prove a specific product classification.

But in the interim period between now and April 2027, the existing characterisation rules still apply. The High Court's pending decision in Block Earner will determine whether fixed-yield products need licensing under the current regime. Operators offering earn, yield or staking products should be monitoring that decision closely and have contingency plans for both outcomes.

The stablecoin SVF framework creates a tiered market. Below $200 million in stored value, an issuer operates under ASIC licensing alone. Above $200 million, APRA prudential supervision applies with substantially higher compliance costs. This creates an incentive for issuers to either stay well below the threshold or to scale rapidly enough that the additional compliance cost is proportionate to revenue. The middle ground is uncomfortable.

And the debanking problem remains unsolved by any legislative instrument. Operators should assume that obtaining an AFSL will not automatically open doors at the major banks and should plan their banking relationships accordingly, including consideration of non-traditional banking providers and foreign correspondent banking arrangements.

This article is for general information purposes only and does not constitute legal advice. You should seek professional advice tailored to your specific circumstances before acting on any information in this article. Liability limited by a scheme approved under Professional Standards Legislation.