Where things stand
On 25 September 2025, the Australian Government released exposure draft legislation aimed at regulating operators of platforms that hold digital assets on behalf of customers – see our article here.
On 26 November 2025, Parliament introduced the Corporations Amendment (Digital Assets Framework) Bill 2025 (the Bill).
The Bill proposes to introduce two new categories of financial products under the Corporations Act:
Digital Asset Platforms (DAPs).
Tokenised Custody Platforms (TCPs).
Operators of these platforms will be required to hold an Australian financial services licence (AFSL) and comply with the general obligations that apply to all AFSL holders. These obligations will not apply to digital asset issuers themselves or to businesses that create or use digital assets for non-financial purposes.
The Bill sets out the meaning of a DAP and TCP (amended from the original exposure draft) as follows:
A DAP is a facility where an operator holds digital tokens (underlying assets), either for themselves or on behalf of someone else.
A TCP is a facility where an operator identifies and holds assets other than money, issuing a single digital token for each asset, which grants the holder the right to redeem or direct the delivery of that asset. The operator acts on behalf of the token holder, often as trustee or bailee, and may also be authorised to manage the asset according to the holder’s instructions.
It is important to note that a TCP cannot be a DAP.
Key differences between the exposure draft legislation and the Bill
The Bill largely retains the Exposure Draft architecture but sharpens definitions, clarifies scope, adds an explicit agency rule, and streamlines transition. The key changes are set out below.
The Bill narrows the concept from any “digital object” to an electronic record a person can factually control (transfer, exclude others, and demonstrate control), and gives the regulators power to include or exclude classes. Practical examples clarify what is and isn’t a digital token, reducing ambiguity for platforms and consumers.
The Bill replaces the generic notion of possession with a bespoke rule for digital tokens. A person possesses a digital token if they can, as a matter of fact, transfer it, exclude others from transferring it, and demonstrate both. Joint possession does not arise where a person needs another’s express cooperation and that other person can act unilaterally.
The Bill provides that mere redemption rights are to be disregarded when deciding whether a wrapped token (or rights attached to it) is a financial product, unless the holder’s rights materially differ from holding the referenced asset directly. A wrapped token covers, among other things, tokens redeemable for an underlying asset of a tokenised custody platform, or tokens held through decentralised wrapping software or public digital token infrastructure.
The Bill replaces the Exposure Draft’s “intermediated staking arrangement” with a broader “custodial staking arrangement” and extends the regime from digital asset platforms to include tokenised custody platforms. It also expands the ‘benefits’ limb of the definition to include lower transaction fees and any other benefits prescribed by the regulation.
ASIC’s asset holding standards must require non-underlying client money to be held on trust and provide operators with options for holding client money to manage debanking challenges.
Section 761GE has been added as part of the Bill which deals with agents appointed by operators of DAPs or TCPs. Operators are expressly responsible for acts of agents and sub‑agents, even if fraudulent or outside authority, tightening platform accountability.
The Exposure Draft contemplated a two-stage transition (initial 6 months and a second 12-month period from commencement). The Bill adopts only a single 6-month transition period from commencement.
Notable changes to the Explanatory Memorandum
The accompanying Explanatory Memorandum (EM), in contrast to the original Exposure Draft Explanatory Materials, now includes numerous examples to further clarify sections of the Bill. Example scenarios have now been added for the following items:
Digital tokens.
Physical delivery.
Possession.
Joint factual control.
Exemptions.
Given the Bill’s substantial amendments to numerous definitions originally outlined in the exposure draft, the EM has revised its clarifications to reflect each updated definition. Of note, the EM now explains that the definition of DAP captures a wide variety of arrangements that are often referred to as ‘custodial’ in the digital asset industry. This clarifies that the definition does not extend to other types of arrangements as part of traditional securities lending and collateral arrangements that involve total title transfer. Similarly, TCPs are also explained to not extend to other types of arrangements as part of traditional securities lending and collateral arrangements involving total title transfer.
With the inclusion of subsection 761GE(1) in the Bill, the EM now features a section addressing agents appointed by operators of DAPs and TCPs. It clarifies that an operator of a DAP or TCP may appoint an agent to perform any task the operator is authorised to undertake in connection with the platform. Importantly, the operator remains liable for all actions taken by the agent.
The EM now also includes a statement of compatibility with human rights and an impact analysis of the proposed legislation.
What’s next
The consultation is expected to continue at the next parliamentary sitting in 2026 following the adjournment of the second reading.
Back to Regulation in Motion main page