Australia’s New Stablecoin Licensing Shift: Unlocking Innovation and Reducing Barriers

Main Points :

• ASIC (Australian Securities & Investments Commission) has introduced a class‐relief exemption (Instrument 2025/631) for intermediaries distributing stablecoins issued by AFS-licensed issuers.
• The exemption removes the need for intermediaries to hold separate licenses such as AFS, market, or clearing and settlement facility licences for certain stablecoin distribution activities.
• The relief is currently applied to one stablecoin: AUDM, issued by Catena Digital. As more stablecoin issuers obtain AFS licences, ASIC may extend the exemption.
• Intermediaries relying on the exemption must comply with consumer protection requirements, including providing product disclosure statements (PDS) when available.
• The exemption is temporary, set to expire on June 1, 2028, unless replaced or extended. It is considered a “bridging” measure pending more permanent regulatory frameworks.
• Meanwhile, ASIC is revising its guidance (Information Sheet INFO 225), based on its December 2024 Consultation Paper 381 (CP 381), to clarify how laws apply to stablecoins, wrapped tokens, meme coins, etc.
• The Australian Treasury is concurrently developing a broader digital assets policy, which includes frameworks for payment stablecoins, tokenization, and real-world assets.

What the New Exemption Means

Regulatory Relief for Intermediaries

Prior to this change, intermediaries—such as exchanges, brokers, custodians, or payment service providers—who distributed stablecoins (even if the issuer already held required licences) had to themselves apply for additional licences under the Corporations Act. This created cost, time, and regulatory burden. With the new exemption, intermediaries distributing stablecoins issued by AFS-licensed entities no longer need their own AFS, market, or clearing facility licences for secondary distribution activities.

This includes services such as dealing in the stablecoin (but not issuing), providing general advice, market making, and custodial services.

Scope & Limitations

• Stablecoin issuer requirement: Only stablecoins issued by entities with a valid Australian Financial Services licence qualify.
• Intermediate roles covered: The relief is for secondary distribution—intermediaries are not issuers.
• Product disclosure obligations: If the issuer prepares a Product Disclosure Statement (PDS), intermediaries must ensure that retail clients have access to it. Transparency is being preserved.
• Temporary duration: Exemption runs until June 1, 2028, unless earlier repealed or replaced by more comprehensive regulation.

Current and Future Impact

• Current beneficiary: The stablecoin AUDM, issued by Catena Digital, is the first and only stablecoin to benefit at present.
• Potential expansion: ASIC has stated that as additional stablecoin issuers obtain AFS licences, the scope of relief will likely grow to include them. This could broaden the stablecoin ecosystem considerably.
• Regulatory clarifications coming: Updated version of INFO 225 will include clearer guidance, practical examples, better definitions for what kinds of digital assets fall under financial product definitions (including stablecoins, wrapped tokens, meme coins).
• Part of a larger policy push: The Treasury is working on digital asset reforms, including payment stablecoin frameworks, tokenisation of real-world assets, possibly central bank digital currency (CBDC) considerations.

Recent Developments & Comparisons

To understand this measure in context, it helps to look at what other jurisdictions are doing and what the trends are globally.

Trends in Other Jurisdictions

• In the United States, stablecoin regulation is increasingly under discussion, such as transparency of reserves, redemption rights, audits (e.g. via proposed laws like the GENIUS Act). Australia’s move shares the trend of clarifying regulatory responsibilities and bridge-measures.
• In the European Union, the Markets in Crypto-Assets regulation (MiCA) imposes more comprehensive and prescriptive regulations for stablecoins, including reserve requirements, governance, and consumer protection. Australia’s exemption is lighter in comparison but moves in a similar direction of formalising rules.
• In Hong Kong, Singapore, etc., regulatory regimes tend to require full licensing for issuers and often stricter obligations; Australia is positioning itself somewhat between very heavy regulation and lighter or no regulation.

Market Implications and Industry Response

• The relief could lower barriers for fintech startups, payment platforms, and exchanges wanting to offer stablecoin-based services in Australia. This may include improved liquidity for AUD-denominated stablecoins, more merchant adoption, and innovation in cross-border payments and tokenization.
• It may also lead to competitive advantages for stablecoins issued under Australian regulatory oversight, possibly increasing demand for well-regulated stablecoins vs those with ambiguous status.
• However, risks remain: the quality of collateral backing stablecoins, redemption mechanisms, transparency, potential for run risk, fraud, or misuse, and how consumer protection will be enforced. Intermediaries must still manage reputational risk, and regulators will likely monitor how this transitional period unfolds.

Practical Advice for Stakeholders

For those exploring new crypto assets or planning blockchain-based services under this new regime:

1. Check if a stablecoin issuer is AFS-licensed. If not, the exemption won’t apply for its intermediaries.
2. Ensure access to Product Disclosure Statements. Retail clients must be able to see full disclosure if one exists.
3. Monitor the updates to INFO 225. These will provide further clarity on definitions, what counts as “financial product,” and intermediary vs issuer obligations.
4. Prepare for the long term. The exemption is temporary, so establishing compliance, risk controls, governance, and transparency from the outset will help in the eventual transition to a permanent framework.
5. Watch competition and market opportunities. Stablecoins like AUDM might benefit from early adoption; partnerships, integrations with payment services, merchant settlements, and cross-border flows could be areas of growth.

Summary

Australia’s ASIC has introduced a landmark regulatory relief for intermediaries distributing stablecoins, via Instrument 2025/631, reducing the licensing burden as long as issuers hold AFS licences. The change targets secondary distribution, includes consumer protection obligations like ensuring product disclosure, and is designed as a bridging measure until more permanent rules (especially for payment stablecoins) are set up. Currently only AUDM qualifies, but the door is open for more issuers. This shift aligns with global trends toward clearer, more functional regulation of stablecoins—balancing innovation and oversight. For investors, developers, and blockchain practitioners, this represents both an opportunity and a prompt to engage early, build strong disclosure and risk practices, and track further regulatory evolution.