How would you describe the current state of cryptocurrency regulation in Australia, and how quickly is it evolving?
Australia is currently undergoing a significant and deliberate transformation of its digital asset regulatory landscape. We are moving rapidly from a regime primarily focused on anti-money laundering (AML) and counter-terrorism financing (CTF) obligations for crypto exchanges toward a comprehensive, end‑to‑end regulatory framework. This includes the Australian financial services licence (AFSL) under the Australian Securities and Investments Commission (ASIC), alongside strengthened and expanded AML/CTF obligations under Australian Transaction Reports and Analysis Centre (AUSTRAC). For me, this is extremely positive as it provides the regulatory clarity businesses need to innovate at pace, as well as clear guardrails for digital asset firms to operate.
The oversight of digital assets has been recognised as a priority for the government, marking a clear commitment to developing a comprehensive and ‘fit-for-purpose’ digital asset regime. With the release of the Digital Asset Framework Bill 2025 and final legislation expected this year, I see 2026 as the defining year for digital assets in Australia.
The focus now must shift to implementation — ensuring regulatory expectations are fit for purpose, proportionate to risk, and reflect the unique characteristics of the digital asset industry. Regulations should be carefully calibrated so that compliance costs do not stifle innovation or deter responsible market participants, noting that the same expectations as TradFi will not necessarily work or be applicable. This also should not be viewed as the end state: the regulatory framework still needs to evolve at pace to support the rapid innovation and increasing maturity of digital assets.
Beyond regulation, what do you see as the main structural or market challenges facing the Australian digital asset ecosystem today?
Institutions in Australia have historically approached digital assets with a degree of caution, and as a result, institutional adoption has developed at a steadier pace than what I have observed in other markets. That said, it is clear this dynamic is beginning to shift, with growing momentum and increased confidence driven by a clearer regulatory framework. I expect institutional engagement to accelerate over the next couple of years as confidence continues to build and the digital asset sector embeds stronger governance, control frameworks, resilient infrastructure and robust risk management practices.
Another key challenge I see is talent and experience in digital assets and blockchain — this is in fact felt across the majority of global markets. Digital assets require a rare combination of deep technical and operational understanding, along with thorough risk and compliance expertise. Competition for this talent is global, particularly as other jurisdictions begin to introduce their own regulatory frameworks. For Australian‑based firms, and firms globally, building and retaining experienced teams locally will remain challenging, especially as businesses scale internationally, creating a global demand for digital asset expertise as operational complexity continues to grow.
From a custody and infrastructure perspective, where do you see the biggest gaps between regulatory expectations and market readiness?
The biggest gaps tend to sit between regulatory expectations and the practical realities of operating digital asset infrastructure.
Regulators are rightly focused on outcomes such as asset segregation, operational resilience, governance, and consumer protection. However, the challenge is translating these expectations into effective controls for digital assets, rather than simply mirroring traditional models.
One key gap is around custody models themselves. Regulatory expectations are often framed through a traditional securities custody lens, whereas digital asset custody relies on fundamentally different mechanics, such as private key management, multi‑party controls, and onchain settlement. While the market has made significant progress in developing institutional‑grade custody solutions, there is still work to do to ensure regulatory requirements are clearly mapped in a way that is both robust and workable.
In some cases, operational resilience is another area where expectations are evolving faster than market readiness. Regulators are increasingly focused on resilience, recovery, and incident management, particularly for systemically important service providers. This makes complete sense and is absolutely critical in digital asset custody. While leading custodians are investing heavily in these areas, smaller or newer market participants may still be building the depth of controls, testing, and governance that would likely be expected under a formal licensing regime.
Importantly, there remains a gap around industry‑wide standards and consistency. The digital asset market is still relatively fragmented, and approaches to custody structures, control frameworks, and third‑party dependencies still vary. As regulation matures, clearer supervisory guidelines will be key to ensuring there are consistent best practices and standards across the industry. But overall, the direction of travel is very positive as market infrastructure and custody solutions are maturing quickly, and regulatory engagement has become more constructive and informed. Bridging the remaining gaps will require continued dialogue between regulators and the digital asset industry to ensure expectations are proportionate, risk‑based, and aligned with how digital asset infrastructure actually operates.
Looking ahead, what does a mature and competitive digital asset market in Australia need to get right — beyond just the regulatory framework
Regulation provides a critical foundation, but it is not sufficient to drive sustainable growth or long‑term confidence. For me, a key priority and prerequisite is the continued development of robust, institutional‑grade infrastructure. This includes secure custody solutions, resilient market infrastructure, and reliable connectivity across trading, settlement, and custody.
As digital assets become more integrated into the financial system, expectations around uptime, resilience, and operational risk management will increasingly mirror those applied to other critical financial market infrastructure, and we are already seeing these expectations today. Given that digital assets operate in fundamentally different ways from traditional financial services, digital asset firms need to be proactive in ensuring their resilience and security frameworks meet the appropriate standards.
Strong governance, compliance, and risk management will also be critical. For digital assets to be viewed as a credible and enduring part of Australia’s financial services landscape, firms must demonstrate clear accountability, effective controls, and mature risk frameworks that cover areas such as financial crime, technology risk, third‑party dependencies, and operational resilience. This is particularly important as institutional participation continues to grow; window-dressing will not cut it. This is also why I mentioned the importance of talent and capability earlier. Ensuring you have continued investment in skills, education and leaders will be essential to support high standards of risk management and compliance.
Finally, collaboration across the ecosystem is incredibly important.
Constructive engagement between industry participants, regulators, policymakers, and traditional financial institutions will help ensure that standards evolve in a consistent and practical way.
If Australia can combine regulatory clarity with strong infrastructure, capable firms, and ongoing collaboration, it will be well‑placed to support a mature, competitive, and globally credible digital asset market over the long term.
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Crossover Markets
Brandon Mulvihill
Image: Zodia Custody 
