Australia's cryptocurrency sector is facing a critical juncture as persistent de-banking practices and legislative gridlock threaten to undermine the nation's digital asset ambitions, despite record market growth and user adoption. Industry leaders from major platforms like OKX and Coinbase have voiced urgent concerns, highlighting a stark contrast between booming consumer interest and a restrictive operational environment.
De-banking, where financial institutions deny services to crypto businesses, remains a significant operational hurdle. Kate Cooper, CEO of OKX Australia, emphasized at the 'XRP Australia 2026' event that banking restrictions continue to hinder exchange operations despite ongoing regulatory discussions. John O’Loghlen, Coinbase's managing director for APAC, advocates strongly for ending these practices, arguing they stifle financial innovation and consumer protection. He expressed particular concern about potential over-regulation of non-custodial wallet developers and public blockchain infrastructure providers.
Legislative progress has stalled significantly following a recent change in government. Prominent crypto lawyer Bill Morgan notes that discussions around crypto-related legislation have diminished, creating uncertainty for long-term business investments. Proposals for licensing frameworks and clearer tax treatment guidelines, previously under parliamentary consideration, are now delayed. Concurrently, proposed reforms to payment service provider rules are generating industry apprehension, with fears they could impose excessive requirements on blockchain technology companies.
This regulatory uncertainty unfolds against a backdrop of remarkable market resilience. The Independent Reserve Cryptocurrency Index reports that 31% of Australians now own or have owned cryptocurrency, a record high and an increase from 28% in 2024. Furthermore, 29% of respondents plan to invest in the coming year. The total user base exceeds 4.5 million, representing approximately 18% of the adult population.
A key growth driver is the increasing involvement of Self-Managed Super Funds (SMSFs). More trustees are investing in digital assets to diversify portfolios, often setting up new funds specifically for crypto as large superannuation funds typically prohibit such holdings. The introduction of Australia's first spot Bitcoin and Ether ETFs in 2024 has further facilitated institutional and individual investment.
Industry leaders point to some regulatory progress as a reason for optimism. The Australian Securities and Investments Commission (ASIC) and Treasury have deepened their knowledge of digital assets. The Corporations Amendment (Digital Assets Framework) Bill 2025, currently under review, aims to establish clear rules requiring digital asset platforms and custodians to obtain Australian Financial Services Licences.
However, Australia's regulatory pace lags behind other major economies. Singapore implemented comprehensive digital asset frameworks in 2023, and the European Union finalized its Markets in Crypto-Assets (MiCA) regulations in 2024. Analysts warn that without timely action, Australia risks falling behind regional competitors, as regulatory clarity is crucial for attracting investment and fostering innovation.
The industry has proposed specific solutions, including establishing clear de-banking guidelines for financial institutions, accelerating legislative processes, creating proportionate regulations based on service types, and enhancing collaboration between industry and regulators. The consensus is that the sector is transitioning from experimentation to wider adoption, but timely and balanced regulatory action is essential to secure Australia's position in the global digital asset landscape.
