Core Viewpoint - Australia is proposing draft legislation to regulate digital asset platforms, aiming to enhance consumer protections and provide clarity for the industry [1][2]. Regulatory Framework - The proposed bill is described as the "cornerstone" of the government's digital asset roadmap, aligning Australia with international standards [2]. - It introduces two new financial products under the Corporations Act: Digital Asset Platforms and Tokenized Custody Platforms, subjecting them to the same licensing and consumer protection rules as traditional finance [2]. Licensing and Compliance - Operators of digital asset platforms will be required to obtain an Australian financial services license, manage conflicts of interest, provide dispute resolution systems, and meet minimum custody and settlement standards [2]. - Non-compliance could result in penalties of up to 10% of annual turnover, although small platforms with annual transactions below AUD 10 million (USD 6.6 million) and client transactions below AUD 5,000 (USD 3,300) will be exempt [3]. Addressing Consumer Safeguards - The legislation aims to address gaps in consumer safeguards highlighted by recent failures in the sector, particularly regarding the pooling and holding of client assets [3][4]. - It extends existing Australian financial services frameworks to cover the riskiest parts of digital asset businesses [4]. Adaptability of Regulations - The legislation allows regulators to adapt their obligations in response to technological changes, preventing rigid rules that could hinder new business development [5]. - The government is collaborating with the Australian Securities and Investments Commission on transitional arrangements before the reforms are implemented [5].