Australia’s Crypto Trust Declines Amid Regulatory Challenges

TLDR

• Trust in crypto assets in Australia has fallen to 60%.
• Major exchanges remain operational despite rising compliance costs.
• 82% of younger investors report trading profits in 2025.

Australia’s crypto adoption has reached a plateau, as indicated by a recent report that cites a decline in trust in digital assets despite ongoing regulatory efforts by the Labor government. As of 2025, trust in these assets has dropped to 60%, raising concerns about the future of cryptocurrency in the country.

Several key figures are at the forefront of this development, including Jason Titman, CEO of Swyftx; Jim Chalmers, Treasurer of the Labor Government; and officials from the Australian Securities & Investments Commission (ASIC). These individuals, along with their respective organizations, play a pivotal role in shaping the regulatory landscape aimed at addressing these issues.

Regulatory Challenges in the Crypto Sector

Jason Titman, CEO of Swyftx, has been vocal about the challenges posed by the lack of concrete regulations. “The promise of crypto regulation at some undefined point in the future is not as important to a lot of investors as the actual delivery of those rules,” stated Titman. Meanwhile, Jim Chalmers is pushing forward a regulatory blueprint that focuses on licensing, stablecoin frameworks, and payment modernization, all set for public consultation in 2025.

ASIC continues to emphasize that crypto assets are subject to financial services law. The agency has pursued enforcement actions against entities such as Qoin, Block Earner, Kraken, and Finder Wallet, reinforcing the idea that just because a product involves a crypto asset doesn’t mean it is exempt from existing financial regulations.

Impact on Exchanges and Institutions

The crypto markets in Australia are not only facing trust issues but also rising compliance costs. These expenses are impacting operations, thereby creating barriers for new market entrants. Interestingly, no direct public grants or institutional funding allocations for crypto startups have been disclosed in recent government statements.

Despite these financial constraints, major Australian exchanges like Coinbase Australia, CoinSpot, and Swyftx remain operational, all supporting major Layer 1 coins. However, institutional involvement continues to be limited, as mainstream banks are still hesitant to onboard crypto businesses. Debanking persists as a critical challenge, leading to asset flow disruptions and exchange closures.

Crypto Assets Under Regulatory Scrutiny

Among the crypto assets drawing regulatory attention are Bitcoin (BTC), Ethereum (ETH), and Filecoin (FIL). These assets have appeared frequently in earlier enforcement actions by ASIC. Furthermore, stablecoins and DeFi tokens are subject to increased scrutiny due to newly proposed licensing and payment bill provisions.

The Treasury has confirmed that businesses dealing in stablecoins or wrapped tokens will not require a full financial markets license under new reforms, signaling regulatory progress. Nonetheless, enforcement actions targeting unlicensed products continue to rise, which could further discourage retail investors.

Market Trends and Community Sentiment

Reports indicate that crypto ownership rates have remained flat in 2025. Interestingly, 82% of younger investors reporting trading profits suggest that retail activity persists, although it has not translated into increased Total Value Locked (TVL) or liquidity within the ecosystem. Additionally, no major GitHub repo activity or developer roadmap shifts have been observed in response to these regulatory issues.

Community sentiment on Australian crypto platforms such as Twitter and Discord reflects frustration with the prolonged regulatory delays and ongoing banking restrictions. Notably, there has been no major coordinated public response from developer teams, underscoring a sense of stagnation in terms of collective sentiment or action.