Senate Endorses Bill Mandating Financial Services Licenses
On March 16, 2026, the Australian Senate Economics Legislation Committee released a report supporting the Corporations Amendment (Digital Assets Framework) Bill 2025. The legislation proposes a significant shift in crypto oversight by requiring platforms and custody services that hold customer assets to obtain an Australian Financial Services (AFS) license. This move integrates digital asset providers into the same regulatory architecture as traditional financial firms.
Should the bill become law, companies operating without an AFS license would be granted a six-month grace period to secure the necessary authorization. The framework amends the Corporations Act 2001 and the Australian Securities and Investments Commission Act 2001, targeting intermediaries rather than the underlying blockchain technology, a move designed to enhance consumer protection and market integrity.
Regulators Target Economic Function, Not Technology
The proposed framework reflects a clear regulatory philosophy articulated by Australia's securities watchdog. Rhys Bollen, the head of fintech at the Australian Securities and Investments Commission (ASIC), has stated that crypto should be regulated based on its "economic substance rather than technological form." This principle-based approach avoids creating a separate, crypto-specific legal framework and instead applies existing financial laws based on an asset's function, such as treating tokenized securities as securities.
This strategy focuses regulatory efforts on the conduct of centralized intermediaries—exchanges, custodians, and lenders—where regulators believe most consumer harm has occurred. By aligning digital asset rules with established financial principles, Australia aims to provide clearer guidelines for market participants and reduce opportunities for regulatory arbitrage that can arise from bespoke, technology-specific legislation.
Ripple Positions for Regulated Market as APAC Volume Doubles
Leading market participants are already adapting to the anticipated regulatory changes. Payments firm Ripple is actively seeking an Australian Financial Services License through a proposed acquisition of BC Payments, a strategic move to embed its operations within the country's regulated financial system. This proactive step highlights the industry's preparation for a more stringent compliance environment.
Ripple's focus on Australia is underscored by its significant growth in the region, with its Asia-Pacific payments volume having nearly doubled year-over-year in 2025. While the new licensing requirements will increase compliance costs, the resulting regulatory clarity is expected to legitimize the market and attract further institutional investment, a trend exemplified by Ripple's expansion strategy.
