Why Zodia Custody welcomes Australia’s draft digital asset legislation

The Australian Government’s exposure draft for Digital Asset Platforms and Tokenised Custody Platforms was unveiled by Assistant Treasurer Dr Daniel Mulino at the Global Digital Asset Regulatory Summit, hosted by the Digital Economy Council of Australia (DECA). We acknowledge the leadership of DECA and its CEO Amy-Rose Goodey in convening industry, regulators, and policymakers at such a pivotal moment.

For Zodia Custody, the release of this draft bill is a much-anticipated regulatory milestone, and a clear signal that digital assets are continuing to move mainstream.

We believe the legislation lays the groundwork for a safer, stronger ecosystem. Here are five reasons why we welcome it.

 1. Strengthening Australia’s trusted financial system

Australia’s financial sector is globally recognised for its strength, resilience, and investor protections. As digital assets become more important, those same protections must extend into the digital realm.

The draft bill makes this explicit by creating a new category in the Corporations Act 2001 for Tokenised Custody Platforms (TCPs), requiring them to hold an Australian Financial Services License (AFSL) and comply with obligations such as acting “efficiently, honestly and fairly”.

“Australia’s financial system is already one of the most trusted in the world. Extending those same standards into digital assets is essential if investors, corporates and institutions are to participate with confidence,” said Ryan Hodges, Managing Director, Zodia Custody Australia. “This draft bill creates the bridge between traditional and digital finance and it positions Australia to become one of the institutional hubs for digital assets across Asia-Pacific.”

As a custodian built by Standard Chartered and backed by National Australia Bank, Northern Trust, SBI Holdings, and Emirates NBD, Zodia has operated to bank-first controls from day one – segregating assets, securing them in HSMs, and embedding governance aligned to global financial institutions. This legislation validates that model.

2. Legitimising the good, excluding the bad

Assistant Treasurer Dr Daniel Mulino said this legislation is “about legitimising the good actors and shutting out the bad.” That distinction matters. Failures of poorly run operators have undermined confidence across the sector.

By introducing specific obligations, including minimum custody standards for safekeeping, recordkeeping and client asset segregation, as well as standards for transaction facilitation and settlement, the draft bill ensures only those willing to meet high expectations on governance and custody will remain.

3. Connecting traditional and digital finance

The Treasury’s draft bill is a pivotal moment for bridging traditional and digital markets. By creating a clear framework for tokenised custody, it enables safe participation for millions of investors, businesses, and corporate treasuries.

It also provides clarity on activities, such as staking, wrapped tokens, and public token infrastructure, by creating targeted rules rather than constraining  digital assets into frameworks designed for traditional intermediaries. For Zodia, custody is not just about safekeeping assets. It is about enabling safe, compliant ecosystem interconnectivity through networks like Interchange, ensuring clients can transact without the risks of pooled or commingled assets or increased counterparty exposure.

4. Raising the bar to global standards

As Julian Sawyer, CEO of Zodia Custody, has often highlighted: custodians need globally recognised standards, much like the “qualified custodian” designation in the US. Australia’s draft framework moves us in that direction, recognising custody as critical financial market infrastructure.

“Globally, we have seen that strong custody rules underpin trust and adoption. Custodians should be held to the highest standards, just as they are in traditional finance,” said Julian Sawyer, CEO, Zodia Custody. “Zodia Custody was designed to meet those standards from day one, which is why we welcome this draft legislation as a step towards creating a consistent, globally-recognised framework for digital asset custody.”

5. Positioning Australia as APAC’s institutional hub

Other leading jurisdictions we operate in including the UK, EU, Singapore, and Hong Kong have already put in place or proposed custody rules to build trust and drive adoption. By doing the same, Australia can cement its position as one of APAC’s trusted institutional hubs for digital assets in Asia-Pacific.

For Zodia Custody, operating as a tokenised custody platform, this framework validates the approach we have taken from inception: operating to bank-grade standards, ensuring no commingling of assets, and adopting governance practices aligned with global financial institutions.

In summary: What this means for custodians like Zodia

• Legitimisation & clarity: Custodians will be able to be formally recognised as licensed Tokenised Custody Platforms, creating a clearer legal foundation for custodians like Zodia Custody Australia.
• Barrier to entry: The AFSL requirement raises the compliance bar, favouring bank-aligned and institution-first players like Zodia, while squeezing out under-capitalised or less compliant competitors.
• Trust as differentiator: With “efficient, honest, and fair” obligations embedded in law, custodians who already operate to institutional standards (segregated wallets, HSMs, traceability) can leverage regulation as a competitive advantage.
• Alignment with peers: By mirroring developments in other regions such as the EU and Singapore, Australia positions itself as globally interoperable – critical for cross-border settlement and custody networks like Interchange.

The draft bill is not the end of the conversation but the beginning of a more mature market. This is the moment for industry leaders to lean in, shape the details, and prove that digital assets can be held, traded, and built upon safely.

Zodia Custody is committed to being part of that journey.