Australia’s center-left government, led by Prime Minister Anthony Albanese, has shared its plan to regulate crypto exchanges and custody services under the country’s existing financial laws. Alongside this move, the government also promised to address the growing issue of debanking — a practice where banks deny services to crypto-related businesses.
The announcement arrives as the country heads toward a federal election, which must take place on or before May 17, 2025. With the latest polls suggesting a close contest between the Labor Party and the opposition Coalition, both sides are signaling strong interest in digital asset policy. The opposition, led by Peter Dutton, has also committed to prioritizing crypto regulation if elected.
⚡BREAKING:
— Litest (@LitestApp) March 21, 2025
AUSTRALIA’S GOVERNMENT UNDER THE LABOR PARTY PROPOSES REGULATING CRYPTO EXCHANGES. pic.twitter.com/yiyNevzsvF
According to the Treasury’s March 21 statement, crypto exchanges, brokers, and custodians will soon be required to comply with rules similar to traditional financial service providers. These include obtaining an Australian Financial Services Licence (AFSL), meeting capital requirements, and ensuring customer asset protection.
However, not all crypto platforms will be affected. The government clarified that smaller and early-stage firms, as well as developers of blockchain-based software and non-financial digital assets, will be excluded from these obligations. It’s a targeted approach that balances consumer protection with space for innovation.
The framework also touches on stablecoins. Payment-focused stablecoins will be treated as stored-value facilities under broader payments reforms. Still, certain wrapped tokens and limited secondary trading activities will be exempt from these new requirements.
Addressing the Debanking Problem
In addition to regulation, the Albanese government plans to work with Australia’s four biggest banks to better understand debanking—a major barrier faced by many crypto startups. This collaborative approach is intended to reduce friction between banks and the crypto industry and ensure that legitimate businesses are not unfairly excluded from financial services.
Jonathon Miller, managing director of Kraken Australia, stressed the urgency of these efforts.
“There is an urgent need for bespoke crypto legislation,” he said. “By establishing a clear crypto regulatory framework and mitigating problems like debanking, the government can remove the barriers hampering growth in the Australian economy.”
The government also plans to launch an Enhanced Regulatory Sandbox in 2025. This initiative will let startups test new financial products in a controlled environment without needing to immediately secure a full license. It’s designed to encourage responsible innovation while keeping consumer protection intact.
In parallel, the government is preparing a review into a potential central bank digital currency (CBDC), signaling its interest in exploring the next frontier of digital payments.
The crypto sector has responded positively—though with some caution. Caroline Bowler, CEO of local exchange BTC Markets, said the reforms
“are sensible and would keep Australia competitive with global peers.”
However, she pointed out the need for more detail on capital and custody requirements, warning that overly strict rules could push crypto businesses away from investing in Australia.
Political Timing and What’s Next
While the government aims to release draft legislation for public consultation in 2025, the outcome of the federal election could influence the final shape of the regulations. Still, both major parties have expressed strong support for crypto reform, making it likely that some form of regulation will move forward regardless of who wins.
Abimbola Adu
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