The federal government is advancing its efforts to establish a robust regulatory framework for the digital asset industry in Australia, recently launching a consultation paper on draft legislation aimed at enhancing consumer protections and fostering innovation.

The proposed laws will regulate platforms that manage digital assets such as cryptocurrencies, ensuring they operate under Australian Financial Services law.

This initiative follows extensive discussions with industry stakeholders and aims to provide clarity and certainty for both consumers and businesses.

Should the draft legislation go ahead, issuers of new financial products, including digital asset platforms and tokenised custody platforms, may be required to obtain an Australian Financial Services Licence. They would also need to adhere to strict obligations regarding transparency and fair conduct.

According to the consultation paper, larger platforms will face significant penalties for non-compliance. The activities of smaller, lower-risk platforms may be outside from these regulations.

The federal government, which is aiming to position Australia as a leader in the digital economy while ensuring the safety and security of consumers, is seeking feedback from the digital asset sector and the broader community until 24 October 2025.

“The Australian government now plans to bring operators of digital asset platforms and tokenised custody services into the financial-services regime,” explains Sydney University associate professor, Shumi Akhtar.

Poised for a digital shift

Meanwhile, Australia is on the brink of a significant transformation in financial reporting as momentum builds for mandatory digital financial reporting for listed entities.

Currently, many ASX-listed companies still rely on cumbersome hard copies and PDFs for their financial statements, which can exceed 150 pages and are often difficult to navigate.

In contrast, major jurisdictions like the European Union and the US have already embraced digital reporting. The Productivity Commission has recommended Australia follow suit.

Advocates argue that digital reporting will enhance transparency and efficiency, aligning Australia with global standards and improving access to international capital markets.

While the transition may pose short-term challenges for companies, the long-term benefits are expected to outweigh the initial costs, paving the way for a more streamlined and accessible financial reporting landscape.

At the same time, as Australia’s private-credit market reaches $200 billion, with heavy exposure to high-risk real-estate lending, a new ASIC report has found poor practices including managers charging fees on non-performing loans, related-party lending and inconsistent valuations.

“Transparency is patchy, common terms like senior debt and investment grade are used inconsistently and some funds lack independent valuations,” says Akhtar.

“Regulators see no need for sweeping new laws but are pushing for higher standards. They encourage regular reporting of loan portfolios, disclosure of fees and related-party transactions and clear liquidity and risk management policies.”

ASIC is conducting surveillance, issuing stop orders and plans to publish disclosure and conduct guidelines by late 2025. Further reforms could follow if systemic risks emerge, but for now the focus is on lifting governance and transparency within existing frameworks.

Consumer protections are also top of mind at the Financial Services Council (FSC), which is taking proactive steps to enhance investment governance and consumer protections within the superannuation platforms sector, following recent industry failures.

In a statement, CEO Blake Briggs expressed support for the Assistant Treasurer's initiatives, stating the FSC is committed to addressing the consumer harm caused by the collapses of Shield and First Guardian Master Fund.

The council is collaborating with its members to develop clear guidance for trustees, which will include identifying red flags when selecting investment products and best practices for ongoing monitoring. Additionally, the FSC is facilitating a cross-industry forum to combat superannuation scams and improve risk assessments.

Briggs emphasised the ultimate goal of raising standards to protect investors and restore trust in the superannuation system, while acknowledging that the recent failures have highlighted broader issues within the industry that require further examination.

The FSC has also expressed strong support for the introduction of the Payday Superannuation Bill in parliament, a move aimed at enabling Australians to start earning returns on their retirement savings sooner while providing employers with the flexibility to achieve full compliance.

In a statement, Briggs highlighted that this reform represents a significant step forward in enhancing the superannuation system, as it aligns contributions with pay cycles, making it easier to detect missed payments.

While the changes are set to take effect on 1 July 2026, Briggs acknowledged the implementation challenges ahead and welcomed the Australian Taxation Office's (ATO) risk-based approach to compliance during the initial transition year.

He also noted the bill's adoption of the FSC's recommendation to adjust the contribution timeframe from seven calendar days to seven business days, which will alleviate administrative burdens on employers. The FSC is actively working with industry stakeholders to facilitate the implementation of the new rules.