Edward Carroll

“The upcoming digital asset legislation represents a pivotal moment for Australia’s financial ecosystem — one that could finally provide the clarity and legitimacy the industry has been seeking for years. What’s really needed in the final version is a clear definition of what constitutes a ‘digital token’ and what rights token holders will have. At present, it’s not entirely clear whether Bitcoin and tokenised securities would both be captured under the same category, and that ambiguity could have far-reaching implications for both innovators and investors.”

“It’s also crucial that the government clarifies what Digital Asset Platforms and Tokenised Custody Platforms are actually permitted to do. For example, if all traded shares eventually use blockchain and become ‘digital tokens’, would that mean Digital Asset Platforms can offer custody and trading services for them? We need a practical, future-facing framework that defines where these new digital asset systems sit alongside traditional financial product regimes. Without clear interoperability between the two, regulation risks falling behind innovation.”

“While the consultation period is closed, the reality is that we probably won’t see legislation introduced before the end of 2026 — though the industry would welcome faster progress. There’s still meaningful work to be done translating consultation feedback into a workable bill, but the sooner the rules are formalised, the sooner businesses can plan with confidence.”

“If implemented well, this legislation has the potential to legitimise blockchain as part of Australia’s mainstream financial infrastructure. It could spur an entirely new wave of ecosystem and technology development, from tokenisation of assets to faster, more transparent transaction systems. Most importantly, it sends a signal to entrepreneurs and investors that Australia wants to be a leader, not a follower, in blockchain innovation.”

“So far, the draft appears to lean more heavily toward consumer protection and platform oversight — which is understandable, and a good way to accelerate regulatory adoption. But it’s important to strike the right balance. If we legitimise the service providers who enable access to blockchain and tokenised assets, innovation will naturally follow. Regulation should create guardrails, not roadblocks.”

“Once the law is passed, the industry will need at least 12–24 months to transition into compliance, particularly for firms that don’t yet hold an AFSL. A rushed transition would risk excluding emerging players who could bring valuable innovation to market. A phased approach is far more constructive.”

“Looking ahead, we’re optimistic about the direction this process is taking. The consultation has already sparked thoughtful dialogue between industry and policymakers, and that collaboration will be key to getting the balance right. If we maintain that momentum, Australia has every opportunity to establish itself as a global leader in digital asset innovation and regulation — setting a benchmark others will look to follow.”

By Edward Carroll, Head of Global Markets and Corporate Finance

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