Australia's Draft Crypto and Digital Asset Bill: What It Means for Perth Businesses

Australia has been signalling for a few years that it would eventually bring cryptocurrency under a proper regulatory framework. That process is now moving from signals to legislation. The federal government opened consultation on a draft Digital Asset Platforms bill that would require crypto exchanges and certain digital asset service providers to hold an Australian Financial Services Licence (AFSL), the same type of licence that stockbrokers and financial advisers are required to hold.

For most Perth small businesses, the practical impact will be limited. But if you accept crypto payments, hold digital assets as part of your business finances, or simply want to understand the changing landscape, it is worth knowing what is being proposed and what your obligations might be.

What the Bill Actually Proposes

The bill targets what it calls "Digital Asset Platforms," which are primarily crypto exchanges like Coinbase, Kraken, and local providers like CoinJar and Independent Reserve. Under the proposed framework, any platform that holds or exchanges digital assets on behalf of Australian customers would need an AFSL.

This is significant because it brings those platforms under the same consumer protection obligations that apply to traditional financial services. They would need adequate financial resources, proper custody arrangements for customer assets (a direct response to the collapse of platforms like FTX), internal dispute resolution processes, and compliance with anti-money-laundering rules.

The bill also introduces rules around what qualifies as a digital asset for regulatory purposes and creates a framework for stablecoins (digital assets pegged to a currency like the Australian dollar). It does not ban any particular type of cryptocurrency. The tone of the legislation is regulation rather than prohibition.

If Your Business Accepts Crypto Payments

A small but growing number of Australian businesses accept Bitcoin, Ethereum, or stablecoins as payment. If that includes your business, the draft bill is unlikely to directly change your day-to-day operations. The regulation is aimed at the platforms facilitating exchange, not at merchants who receive crypto as payment.

What does not change is your ATO obligation. The Australian Tax Office has been clear since 2014 that cryptocurrency received as payment for goods or services is treated as ordinary income, valued at the Australian dollar equivalent at the time of the transaction. Capital gains tax applies when you later sell or exchange that crypto if its value has changed. The ATO receives data from crypto exchanges about Australian account holders, so this is an area of active compliance interest.

If you use a crypto payment processor to immediately convert incoming payments to Australian dollars, your accounting is straightforward. If you hold the crypto after receiving it, you need to track the value at the time of each transaction. A good accountant familiar with crypto and a purpose-built crypto tax tool (Koinly and CryptoTaxCalculator are popular Australian options) will save you significant headaches at tax time.

If Your Business Holds Crypto as Treasury

Some businesses, particularly those in tech or finance-adjacent sectors, hold a portion of their cash reserves in cryptocurrency as a hedge or investment. The new regulatory framework is broadly positive for this approach because it improves the safety of holding assets on regulated Australian exchanges.

The proposed custody rules would require exchanges to hold client assets in a way that is segregated from the exchange's own funds, which directly addresses the risk of losing assets if an exchange collapses. Before the regulatory framework existed, Australian businesses holding crypto on exchanges had limited legal recourse if an exchange failed. That gap is being closed.

The ATO treatment for business treasury holdings is that crypto is treated as a financial asset. Any gains when you sell are assessable income or capital gains depending on your holding period and business structure. If you are holding meaningful amounts, talk to your accountant about the most appropriate accounting treatment for your specific situation.

If You Just Want to Understand the Landscape

Most Perth small businesses will follow this legislation as observers rather than participants. The practical takeaway is that Australia is moving toward treating crypto more like other financial products, which generally makes the ecosystem safer and more legitimate over time.

The bill is still in consultation, which means it may change significantly before passing. The timeline for final legislation is uncertain. What is certain is the direction: Australia is not looking to ban or restrict crypto adoption, but it is bringing the infrastructure around crypto under the same consumer protection framework that applies to shares, managed funds, and other financial products.

If you are considering whether to start accepting crypto payments or hold digital assets, the regulatory direction is broadly positive for that decision. A clearer framework with proper consumer protections is better for businesses and customers than the previous situation, where the rules were ambiguous and enforcement was patchy.

What to Actually Do Right Now

If your business already has any involvement with crypto, two actions are worth taking regardless of how the bill progresses. First, make sure your records are in order for ATO purposes. Every crypto transaction needs to be recorded with the date, the Australian dollar value at the time, and what it was for. If your records are a mess, getting them sorted now is far easier than doing it under ATO inquiry.

Second, if you are using a crypto exchange, check that it is an Australian-based provider or one with a clear compliance record. The AFSL regime being proposed will eventually provide a simple way to check this, but in the meantime, sticking to well-known platforms with clear terms and conditions is the sensible default.

Australia is joining a growing list of countries, including the UK, the EU (with its MiCA regulation), and Singapore, that are choosing to regulate rather than restrict crypto. For Perth businesses, that is broadly good news.