Insight,

Australia sets the standard: The next step in digital asset reform implementation and tax transparency

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On 15 October 2026, ASIC released Consultation Paper 392 Digital asset law reform implementation: Proposed standards and guidance (DAF Consultation Paper). The DAF Consultation Paper, and accompanying draft material, sets out how ASIC proposes to implement the Corporations Amendment (Digital Assets Framework) Act 2026 (DAF Act).

On the same day, Commonwealth Treasury released draft legislation to support tax transparency for crypto-assets, in the Treasury Laws Amendment Bill 2026 (Cth) (Tax Reporting Bill). This supports Australia’s implementation of the OECD Crypto-Asset Reporting Framework (CARF) and updates to the existing Common Reporting Standard, building upon earlier consultation in 2024-25.

In this alert, we provide a concise synopsis of the following:

  • In Part A: The key aspects of the DAF Consultation Paper.
  • In Part B: The key aspects of the Tax Reporting Bill.

It will be a busy month. The timing for each consultation requires considered focus. Responses to the Tax Reporting Bill are due first, on 28 October 2026. Responses to the DAF Consultation Paper can then follow by 27 November 2026.

Please contact us if you would like to discuss any aspects of these proposals.

Part A – Proposed standards for the new digital asset regime

Background

At its core, the DAF Consultation paper sets the key standards that will support the new licensing regime under the DAF Act.

The DAF Act establishes a legislative regime for the regulation of entities offering two new financial products: a digital asset platform (DAP) and a tokenised custody platform (TCP). Amongst other things, the DAF Act also grants ASIC specific powers to make asset-holding standards and transactional and settlement standards relating to the new products.

As a refresher, at a high level:

  • a DAP is a platform whose operator holds digital tokens for clients;
  • a TCP is a platform whose operator holds identified underlying assets (other than money) and issues one digital token per asset, which gives the holder a right to redeem the asset or direct its delivery.

The DAF Act commences on 8 April 2027 and firms operating a platform that will constitute a DAP or TCP must apply for an AFS licence, or licence variation, before the transition period ends on 7 October 2027.

Key information

The DAF Consultation Paper is fundamental to the operation of the upcoming digital assets regime. ASIC has reported that it proposes principles-based regulation, guided by international regulatory standards, to provide businesses with sufficient clarity and guidance regarding the practical implementation of the DAF Act. As part of this, ASIC seeks feedback on new DAP/TCP regulatory guidance, asset-holding standards, transactional and settlement standards, and new financial requirements for operators.

The consultation package includes the following key materials:

  • DAF Consultation Paper.
  • User Guide – this is a very useful synopsis of key points and guidance relevant to the consultation. It is also a great starting point for people less familiar with the new regime.
  • Four attachments:
    • Draft ASIC Regulatory Guide containing key expectations.
    • Draft statutory instrument containing asset-holding standards.
    • Draft statutory instrument containing transactional and settlement standards.
    • Draft statutory instrument containing financial requirements.

At-a-glance summary

The following graphic provides a high-level summary of key points in these materials.

Further details of particular requirements are summarised below.

Critically, this alert summarises the proposals and draft rules as published by ASIC for consultation. These are subject to change following consultation. Proactive industry feedback is therefore vital.

Synopsis of key requirements

The DAF Consultation contains significant detail. In the following paragraphs, we summarise several key points but these are not exhaustive.

A. Regulatory guidance relating to DAP/TCP

ASIC proposes a single, new regulatory guide (Regulatory Guide) covering licensing and operator obligations under the DAF Act. The Regulatory Guide will sit alongside existing AFS licensing guidance and cross-refer as required, rather than replacing any current guidance material. Critically, INFO 225 will remain as the primary guidance on characterising a digital asset as a financial product.

Key areas
The Regulatory Guide will:

Regulatory perimeter

  • Cover when a facility may be a DAP or TCP, and ASIC’s guidance on important definitions underpinning the regime.
  • Outline the different financial services that an operator may be providing in respect of a DAP/TCP.
  • Describe several licensing exemptions for DAPs/TCPs including, for example, low-value DAPs, limited advice and arranging and third-party asset-holding arrangements.

Licence authorisations

  • Provide guidance on the new AFS licence authorisations that operators will need to apply for.
  • Clarify how the DAP/TCP regime will interact with the markets licensing and clearing and settlement facility regimes.

Catalogue of existing ASIC guidance

  • Direct firms to existing ASIC guidance on the obligations that apply to all AFS licensees.
  • However, technology dependencies, asset-holding arrangements, multiple functions performed within a single business and the evolving nature of digital asset markets may raise distinct operational, competence, disclosure and conflict-management considerations.

Disclosure guidance (DAP/TCP Guides) and platform rules

  • Provide guidance on ASIC’s expectations on the DAF regime’s bespoke disclosure requirements for DAP and TCP operators. 

Other key points of note

  • Publication of applicants. ASIC is proposing to publish a list of firms applying for, or varying, an AFS licence by the end of the transition period on 7 October 2027.
  • Readability. ASIC is also seeking feedback on the readability of the Regulatory Guide.

B. Asset-holding standards

ASIC proposes minimum standards for how DAP and TCP operators safeguard, identify and administer client assets and money. The standards are principles-based and modelled on ASIC’s existing custody regimes.

The standards prescribe a number of requirements and obligations on DAP and TCP operators including:

  1. Platform governance and compliance. Operators must comply with several obligations relating to governance and compliance including, amongst other things:
    1. providing platform rules before holding underlying assets;
    2. disclosure of material financial or non-financial benefits received from asset-holding;
    3. record keeping; and
    4. ensuring platform staff members have relevant knowledge, skills and training.
  2. Permitted holding arrangements for underlying assets. Underlying assets must be held on trust, under an arrangement that complies with the proposed standards, or in accordance with certain sections of the Corporations Act (relating to client property). Money held for a client that is not an underlying asset must be held in accordance with the client monies regime under the Corporations Act.
  3. Operators must disclose the holding arrangements that apply prior to taking custody.
  4. Management of pooled underlying assets. Operators must maintain accurate records identifying underlying assets and client information and attributable holdings.
  5. Operators must not use, permit the use of, or arrange for the use of, underlying assets in a manner inconsistent with the holding arrangement and the client’s interests and rights.
  6. Client instructions. Operators must have procedures for receiving, verifying and acting on properly authorised client instructions, and must take reasonable steps to facilitate the exercise of a client’s right to redeem or direct delivery of assets.
  7. Third-party custodians. Operators remain responsible for compliance with standards in relation to any use of third-party custodians.

Some key points of note include the following:

  1. Domestic custody. ASIC does not propose to require domestic custody of underlying assets held by DAP and TCP operators, but is considering a fallback arrangement where the domestic DAP/TCP operator can have emergency access to private keys (ie control of the underlying assets) in certain situations.
  2. Wallet and address information. Operators must maintain records of arrangements used to hold digital tokens (ie wallets) and report those arrangements, and wallet addresses to ASIC periodically.
  3. Digital token identifiers. ASIC requires operators to record and use unique identifiers for classes of digital tokens held in custody and make available public records of such identifiers.
  4. Foreign law. Operators must assess, record and comply with any foreign law applying to the holding arrangement.

C. Transactional and settlement standards

ASIC proposes minimum standards for how clients’ transactions are executed and settled on, or through, a DAP. The standards apply proportionally by business model and will be a critical obligation for breach reporting purposes. DAPs which provide custody only and most TCP operations are excluded.

ASIC proposes that the standards will not apply to transactions involving tokenised tangible property or tokenised derivatives that are not financial products (ie under the tangible property exemption).

The standards include broad transactional and settlement standards, which ASIC views as “core obligations” for all operators, and specific standards for certain circumstances. These are summarised below.

Coverage areas
DAP
TCP

Core obligations

  • Record-keeping

✓

(Order matching DAPs only)

✖

  • Client instructions

✓

✓

  • Efficiency and integrity of transactional and settlement functions

✓
(Order matching DAPs only)

✖

  • Fair and effective settlement arrangements

✓
(Order matching DAPs only)

✖

  • Best execution

✓
(Agent or match principal trading DAPs)

✖

Asset admission and conflicts management obligations

  • Asset admission and onboarding controls

✓

✖

  • Separation arrangements for token issuance businesses

✓
(Order matching DAPs only)

✖

  • Prohibition on principal trading

✓
(Order matching DAPs only)

✖

  • Exception to the prohibition on principal trading

✓
(Certain DAPs only)

✖

  • Exception to the prohibition on principal trading

✓
(Certain DAPs only)

✖

  • Operator must not accept shelf space fees

✓

✖

Disclosure and transparency obligations

  • Disclosures and notification of material changes to platform rules

✓

✖

  • Fee disclosures

✓

✖

  • Third-party market making

✓

✖

  • Pre-trade transparency

✓
(DAPs that operate an order book only)

✖

  • Post-trade transparency

✓
(Order matching DAPs only)

✖

  • Requirement to publicly provide trading information

✓
(Order matching DAPs only)

✖

Prohibition on trading misconduct

  • Prohibition on trading misconduct

✓

✖

  • Adequate controls and monitoring

✓

✖

D. Financial requirements

All DAP and TCP licensees would need to comply with several general and tailored financial requirements as AFS licence holders. The obligations are summarised in the table below.

General obligations and licence requirements

  • Licensees will be subject to certain, general financial requirements such as the obligation to have “adequate financial resources” – ie solvency and net positive assets, cash needs and audit requirements.
  • Licensees who hold client money or property are subject to further requirements, imposed as licence conditions.

Financial requirements for all DAP/TCP licensees

  • ASIC is proposing to apply the following requirements through licence conditions:
    1. solvency and positive net assets requirements;
    2. if the licensee holds client money in excess of $100,000 – a requirement to hold $50,000 in surplus liquid funds (SLF); and
    3. if the licensee transacts with clients as principal – an adjusted SLF of $50,000, 5% of adjusted liabilities between $1 million and $100 million, and 0.5% of adjusted liabilities exceeding $100 million.

Financial requirements for operators

  • By way of legislative instrument, licensees that operate (ie issue) a DAP or TCP will be subject to:
    1. tailored cash needs requirements (ie quarterly projections of cashflow, with documented assumptions and conclusions); and
    2. tailored audit requirements (ie audit reports that attest compliance with the financial requirements).

    NTA requirements

    • The DAF Consultation Paper also proposes three models for meeting net tangible asset (NTA) requirements. Each NTA model has concessions for a DAP/TCP operator who engages a third-party custodian to possess or hold all of the underlying assets of the facility. To access this concession, an operator must obtain written assurance and (with some exceptions) audit reports from the custodian (with conditions set out in the draft instrument).  We have extracted the models at the end of this alert.

    Guidance about other amendments

    The DAF Act and anticipated regulations introduce a number of amendments to how the Corporations Act applies to certain arrangements relating to digital assets.

    The DAF Consultation paper clarifies the following:

    • Public digital token infrastructure (PDTI) (eg public permissionless blockchains): INFO 225 will be updated to contain guidance relating to PDTI, including relating to the PDTI exemption for certain digital assets.
    • Wrapped tokens: The DAF Consultation Paper confirms that the redemption right of a wrapped token is ignored when considering financial product characterisation.
    • Custodial staking arrangements (ie the platform stakes client digital tokens in consensus): The DAF Consultation Paper confirms that where a DAP or TCP operator provides a custodial staking arrangement, it will not be regulated as a separate product.

    Stablecoins for use in meeting financial requirements by AFS licensees generally

    ASIC has clarified that stablecoins that meet certain criteria may be used to meet a licensee’s financial requirements. However, ASIC proposes to restrict licensees from using a certain subset of stablecoins. This is summarised below.

    Permitted stablecoins

    • Stablecoins that satisfy the existing definition of “cash equivalent” may be used for NTA requirements. ASIC states that these are likely those currently covered as NCPFs (ie subject to the “eligible stablecoin: relief in ASIC Corporations (Stablecoin and Wrapped Token Relief) Instrument 2025/867) or prospectively covered as “tokenised stored value facilities” under the proposed payments reforms.
    • Stablecoins that are derivatives, debentures or managed investment schemes, or issued by unregulated parties, may not meet the definition.

    Restricted stablecoins

    • ASIC is proposing to restrict stablecoins issued by the licensee or an associated entity from NTA requirements and permit other stablecoins if they meet the requisite definitions.

    Timeline

    The consultation closes at 5pm AEDT on 27 November 2026. ASIC will then review feedback between November 2026 and March 2027 and publish final instruments and guidance in March 2027.

    The overall timeline is shown in the graphic below.

    Part B – Tax Reporting Bill

    The Tax Reporting Bill was released as an exposure draft and amends Schedule 1 to the Taxation Administration Act 1953 (Cth) (TAA). Further to our recent alert, Will you be ready on 1 January 2027 for Common Reporting Standard 2.0 and the Crypto-Asset Reporting Framework?, the Tax Reporting Bill is the Australian enabling legislation implementing CARF and CRS 2.0, together with a new domestic crypto reporting regime. The Tax Reporting Bill has three key parts:

    • a new framework for international cooperative reporting, which is the vehicle for implementing CARF;
    • a new Domestic Crypto Reporting Regime (DCRR) for virtual asset service providers; and
    • amendments to the Common Reporting Standard (CRS) to give effect to the OECD’s updated CRS (CRS 2.0).

    CARF – a flexible framework, with the detail to follow in rules

    The Tax Reporting Bill does not set out the CARF rules directly. Instead, it inserts a new Subdivision 396-D into the TAA. This allows the regulations to prescribe international cooperative reporting frameworks that Australia has agreed to participate in. The Minister may then make rules, by legislative instrument, setting out the detailed requirements, and any administrative penalties for not meeting those requirements.

    Reporting Crypto-Asset Service Providers will collect information for the 2027 calendar year, with first reports due to the ATO in 2028. Much of the practical detail for industry, including how closely Australia will follow the OECD model, will therefore sit in rules that have not yet been released.

    DCRR – domestic reporting by virtual asset service providers

    The DCRR gives effect to the Government’s announcement that CARF-style reporting would be extended domestically. An entity that provides a registrable virtual asset service under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) must report to the ATO on transactions involving an exchange or transfer of a virtual asset by or for an Australian-resident user. Registrable virtual asset services include exchange services, safekeeping, transfer services and certain financial services connected with offers or sales of virtual assets.

    The DCRR applies to transactions from 1 July 2027. Treasury intends reporting to be quarterly, with reports generally due 31 days after the end of each period. Reports are expected to include identification details for the provider and its users, and transaction-level data such as the asset name, date and time, Australian dollar value and transaction IDs. The DCRR is designed to run in parallel with CARF to minimise duplicated compliance effort.

    CRS 2.0 – legislating the OECD amendments

    The Tax Reporting Bill incorporates the OECD’s amendments to the CRS and CRS Commentary into Australian law, with an effective date of 1 January 2027. This brings specified electronic money products, central bank digital currencies and indirect crypto-asset investments within scope, adds new reporting fields and strengthens due diligence, as summarised in our earlier alert. Notably, scholarship plans will no longer be excluded accounts. The existing 1 penalty unit administrative penalty will also be expanded beyond failures to obtain a self-certification. It will cover failures to validate a self-certification, or to act on a change in circumstances, within the time the CRS requires. These CRS changes apply from the 2027 calendar year.

    Next steps

    Submissions on the Tax Reporting Bill are due on 28 October 2026. Reporting financial institutions and crypto-asset service providers should review the Tax Reporting Bill against their existing processes, including for any differences to the OECD model. 

    Contact us, anytime

    If you have any questions about how ASIC’s proposed implementation of the DAF Act may affect your business or would like assistance with Australian financial services licence applications, variations or compliance reviews, please contact us.

    We are closely monitoring developments as we approach the commencement of the DAF Act and are well placed to advise on the implications of the new regime for your business.

    Similarly, if you have any questions about the Tax Reporting Bill and whether your existing systems and processes will be ready for CRS 2.0, CARF and the DCRR, or would like assistance preparing a submission, please contact us.

    Appendix 1: Options for NTA requirements

    Option
    NTA requirements

    Model 1

    DAP and TCP operators will be required to hold NTA in the amount of at least:

    1. where the operator has met the third-party custody conditions:
      1. $200,000 (indexed annually, by reference to CPI);
      2. 5% of the average value of underlying assets possessed or held up to $7,000,000 (indexed annually, by reference to CPI); or
      3. 10% of average revenue; or
    1. otherwise, the greater of:
      1. $14,000,000 (indexed annually, by reference to CPI); or
      2. 10% of average revenue.

    Model 2

    DAP and TCP operators will be required to hold NTA in the amount of at least:

    1. where the operator has met the third-party custody conditions:
      1. $200,000 (indexed annually, by reference to CPI);
      2. 5% of the average value of underlying assets possessed or held up to $7,000,000 (indexed annually, by reference to CPI); or
      3. 10% of average revenue;
    2. where the operator does not, at any time, possess or hold an underlying asset that is a financial product, the greater of:
      1. $7,000,000 (indexed annually, by reference to CPI); or
      2. 10% of average revenue; or
    3. otherwise, the greater of:
      1. $14,000,000 (indexed annually, by reference to CPI); or
      2. 10% of average revenue.

    Model 3

    DAP and TCP operators will be required to hold NTA in the amount of at least:

    1. where the operator has met the third-party custody conditions:
      1. $200,000 (indexed annually, by reference to CPI);
      2. 5% of the average value of underlying assets possessed or held up to $7,000,000; (indexed annually, by reference to CPI); or
      3. 10% of average revenue.
    2. otherwise, at least the sum of:
      1. the amount that is the greatest of:
        1. $2,000,000 (indexed annually, by reference to CPI);
        2. 5% of the average value of underlying assets possessed or held up to $14,000,000 (indexed annually, by reference to CPI);
        3. 10% of average revenue; and
      2. the amount (if any) that is the sum of the following:
        1. $500,000 (indexed annually, by reference to CPI)—where the operator is a DAP operator that acts as an agent;
        2. $750,000 (indexed annually, by reference to CPI)—where the operator is a DAP operator that operates a neutral trading venue; or
        3. $1,000,000 (indexed annually, by reference to CPI)—where the operator is a DAP operator that trades as principal with its clients.

    In this model:

    • ‘acts as an agent’ refers to DAP operators who acquire or dispose of digital tokens on their clients’ behalf and arrange or execute those transactions through another DAP, trading venue or liquidity source, analogous to a traditional finance broker;
    • ‘operates a neutral trading venue’ refers to DAP operators who facilitate the acquisition or disposal of digital tokens by providing a trading venue for offers of acquisition and disposal to be regularly made, analogous to a traditional finance market operator; and
    • ‘trades as principal with its clients’ refers to DAP operators who regularly offer to acquire and dispose of digital tokens either on their own behalf, analogous to a traditional finance market maker, or in the course of facilitating matched principal trading.
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