As the new government sets its agenda, it can now establish Australia as a global leader in the rapidly evolving digital economy. However, this will only be possible with fit-for-purpose regulation which balances innovation and consumer protection, creating a secure and efficient ecosystem for both retail and institutional investors.
As the global digital asset market continues to expand, there is a pressing need for Australia to put in place clear, comprehensive regulation. The industry has matured significantly over the past decade, with digital assets now playing a critical role in financial markets, payment systems and broader economic growth. Yet, without a supportive regulatory framework, Australia risks falling behind other leading economies and losing its competitive edge.
Direct engagement with policymakers
Having spent significant time in Canberra over recent months, engaging directly with senior politicians and government advisers, I have seen a marked shift in the political landscape.
There is a growing recognition across all sides of politics that digital assets represent a critical component of the future economy, and that failing to act could stifle innovation, drive investment offshore and ultimately leave Australia behind in the race to lead the digital economy.
It is encouraging to see that the new government has appointed Dr Andrew Charlton MP as the Assistant Minister for the Digital Economy. Given his background in business and his strong advocacy for digital asset reform, we believe he is well-suited to help drive the legislative changes needed to support the sector’s growth. Additionally, the creation of a dedicated portfolio for the digital economy signals a clear commitment from the government to support this rapidly evolving industry, reinforcing its importance to the broader economy.
The industry needs a clear regulatory direction before entering 2026 to maintain its competitive advantage and safeguard consumer interests.
Three key areas of focus
From my discussions in Canberra, I can see Australian policymakers are increasingly aware of the economic potential of digital assets. However, for the sector to truly thrive, it is essential that new legislation prioritises three critical areas:
- Payments: Digital assets are transforming the way consumers and businesses transact. In particular, we are seeing a rise in the number of consumers using cryptocurrencies like bitcoin to pay for everyday goods and services. We expect that this will continue to become more of a mainstream practice over the next decade.
- Stablecoins: As a bridge between traditional finance and digital assets, stablecoins offer significant opportunities for financial inclusion and faster, lower-cost transactions. Clear regulation in this area, which actively seeks to embrace the asset class, will help build confidence and drive broader adoption.
- Tokenisation: The tokenisation of real-world assets, including property, equities and commodities, is a transformative development that could unlock trillions in value globally. Australia should be at the forefront of this movement, leveraging its strong financial services sector and robust legal framework.
Learning from global leaders
Australia is already a leader in certain aspects of digital asset innovation, but other regions, like the European Union, have moved ahead with comprehensive frameworks like the Markets in Crypto-Assets (MiCA) regulation.
These frameworks provide stability and predictability for investors while fostering innovation. To remain competitive, Australia must follow suit with its own forward-looking policies. The MiCA framework, for example, enhances market stability by improving risk management practices and creating standardised operating procedures – a model Australia can draw from as it refines its own regulatory approach.
Avoiding the pitfalls of over-regulation
Achieving fit-for-purpose regulation requires a careful balance. It is essential to protect consumers without stifling innovation or driving firms offshore. Australia’s existing financial services framework, built around the Australian Financial Services Licence, provides a strong foundation for digital asset regulation. Building on this rather than reinventing the wheel will allow regulators to strike the right balance between oversight and growth.
However, ASIC’s recent push for a separate market operating licence for cryptocurrency companies is a concerning development. Only two Australian companies currently hold this licence and obtaining it is both costly and time-consuming, potentially hindering global investment, job growth and innovation in Australia. It is critical that both Parliament and ASIC avoid over-governing the sector, ensuring Australia remains an attractive destination for digital asset businesses.
A call for clear, proactive legislation
With the new government now firmly in place, the time for consultation is over. It is critical that draft legislation reaches Parliament in the coming months, providing the clarity needed for institutional investors, financial advisers and businesses to commit fully to this rapidly growing sector. Without this clear direction, institutional investors may be forced to move their capital overseas, financial advisers will struggle to offer their clients relevant opportunities, and consumers will have fewer protections in an increasingly digital economy.
Finally, it is essential that policymakers address the ongoing concerns around scams and consumer protection. During my conversations in Canberra, it has become clear that many MPs still lack a full understanding of how digital assets work, the safeguards that firms have in place, and the real-world use cases of these technologies. With a new wave of MPs entering Parliament, particularly on the government benches, it is crucial to improve education around the sector to ensure informed decision making.
I look forward to working closely with policymakers to shape a regulatory environment which supports innovation, protects consumers and positions Australia as a global leader in the digital economy.
Vakul Talwar, head of Australia at Crypto.com
