The draft legislation also introduces minimum standards for custody and transactional functions, ensuring that SMSF assets are safeguarded and managed transparently. Enhanced disclosure requirements mean trustees will receive clear information about platform operations, fees, risks, and rights, empowering them to make informed decisions.

Globally, regulatory momentum is building, and Australia’s draft legislation positions SMSFs to benefit from innovations seen in other markets. By leveraging the established AFSL regime, the legislation creates a robust environment for SMSFs to participate in digital asset markets, without unnecessary complexity or red tape. This is the critical piece that underpins the proposed regulation and something that Crypto.com has been advocating strongly for.

Australia’s superannuation system is one of the largest in the world, and SMSFs will continue to play a vital role in supporting future growth. The new legislation provides the frameworks and certainty needed for SMSFs to operate confidently in the crypto space, helping Australia remain competitive as other markets evolve, particularly Europe and the United States.

Encouraging innovation and new offerings in Australia

The draft legislation is designed to close regulatory gaps and reduce uncertainty. By defining digital asset platforms (DAPs) and tokenised custody platforms (TCPs) as financial products, the full suite of consumer protections and licensing rules will apply. This includes prohibitions on misleading conduct, unfair contract terms and requirements for transparent disclosure and reporting.

For SMSFs, this means improved access to new products and services, such as tokenised deposits, programmable payments and regulated custody solutions. The framework encourages the development of next-generation financial infrastructure, including enhanced custody measures, which are critical for SMSFs managing significant assets.

The legislation also provides flexibility for future innovation. ASIC will set principle-based standards that can be adapted as technologies and business models evolve, ensuring SMSFs can benefit from new opportunities without being exposed to unnecessary risks.

Supporting SMSFs and the Australian economy

By providing regulatory clarity and targeted safeguards, the draft legislation supports SMSFs in diversifying their portfolios and accessing new asset classes. It aligns with international best practice, ensuring that SMSFs can invest in digital assets with confidence and that Australia remains a credible, well-regulated hub for digital asset innovation.

As the legislation is implemented, SMSFs will be better positioned to realise the benefits of digital assets, including improved liquidity, transparency, and access to capital. The reforms will also encourage more businesses to enter the Australian market, supporting economic growth, job creation and local innovation.

The faster these frameworks are adopted, the sooner SMSFs and the broader superannuation sector will be able to take advantage of the opportunities presented by digital assets, while ensuring member protections and market integrity remain paramount.

For this reason, once the draft legislation closes at the end of October 2025, it is important that the federal government works efficiently through any tweaks, changes and improvements, with a view to introduce the legislation into Parliament as soon as possible.

Key features of the draft legislation for SMSFs

1. Clearer frameworks for investment

The legislation introduces a regulatory regime tailored to the main risks in the digital asset space, focusing on businesses that hold assets on behalf of clients. This approach closes regulatory gaps, reduces the risk of exploitation and is technologically neutral, allowing it to adapt as new forms of tokenisation and services emerge.

2. Enhanced custody measures

Minimum standards for custody and transactional functions will be developed by ASIC, focusing on how platforms hold client assets and execute transactions. This ensures SMSF assets are safeguarded, with transparent reporting and robust operational controls.

3. Targeted disclosure and member protection

Operators of digital asset platforms and tokenised custody platforms will be required to provide clear, concise guides to SMSF trustees, outlining platform operations, risks, fees and rights. This replaces duplicative product disclosure documents and ensures trustees have the information they need to make informed decisions.

4. Encouraging innovation for new products and services

By providing regulatory certainty, the legislation encourages the development of new products and services for SMSFs, including tokenised deposits, programmable payments and digital wallets backed by regulated custody. This will help SMSFs diversify their portfolios and access new investment opportunities.

5. Alignment with international best practice

The reforms align with the “same activity, same risk, same regulation” principle, maintaining consistency with Australia’s global counterparts and the recommendations of international regulatory bodies. This ensures SMSFs can invest in digital assets with confidence, knowing that Australia’s regulatory framework is robust and internationally recognised.

The draft crypto legislation is a positive development for SMSFs, providing the clarity, safeguards, and flexibility needed to invest in digital assets confidently. By establishing clear frameworks and encouraging innovation, the reforms will help SMSFs unlock new investment opportunities and support Australia’s leadership in the global digital asset market.

After years of delay, regulation is in sight, and the government needs to work quickly and in lockstep with the industry to get us over the line.