On September 25, 2025, Australia’s government revealed draft legislation imposing ‘bank-grade standards’ on crypto service providers, seeking to bolster market integrity amidst declining trust.
The legislation aims to balance innovation with consumer protection, potentially transforming Australia’s digital asset landscape despite mixed industry sentiment over regulatory compliance costs.
Australia proposes robust crypto regulations, led by Assistant Treasurer Daniel Mulino, focusing on systemic stability and consumer protection.
Australia unveils a regulatory overhaul of its digital asset markets, led by Assistant Treasurer Daniel Mulino. The new draft legislation, released on September 25, 2025, mandates bank-grade standards for crypto service providers.
Australia Mandates Bank-Grade Standards for Crypto Market
Under the new proposal, regulatory oversight will be primarily handled by the ASIC, AUSTRAC, and APRA, aiming to balance innovation with consumer protection. The legislation is driven by past sector failures and industry lobbying. “Australia’s proposed legislation delivers the clarity and confidence that both consumers and innovators require to build a trustworthy and competitive digital asset sector.” — Daniel Mulino, Assistant Treasurer
Mixed Industry Reactions to Australia’s Regulation Proposal
Reactions from industry players are mixed, welcoming regulatory clarity but concerned about compliance costs. The legislation may prompt consolidation in the market, exempting smaller platforms with limited transactions.
The proposal could influence financial, regulatory, and technological aspects, with potential market consolidation and an anticipated increase in institutional capital once regulatory confidence solidifies.
Regulatory Reform Driven by FTX Collapse in 2022
Australia’s move follows the FTX collapse in 2022, a significant catalyst for regulatory reform. The iteration from passive observation to proactive enforcement marks a turning point in the crypto sector.
Experts indicate potential outcomes aligning with historical trends like increased institutional participation and enhanced market stability, though concerns about stifling innovation persist.
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