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

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.

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.

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.

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