Australia’s crypto exchanges and stablecoin providers may soon encounter more stringent licensing regulations as part of a proposed overhaul of the industry.
On March 20, the Treasury unveiled a new policy document that outlines plans to integrate significant aspects of the digital asset sector into existing financial services legislation.
Officials believe that these regulations will assist in “identifying opportunities, managing risks, fostering innovation, safeguarding consumers, and maintaining market integrity.”
Under the suggested framework, crypto platforms holding digital assets on behalf of customers—such as exchanges, custodians, and specific brokerages—will be required to operate with an Australian Financial Services Licence.
Additionally, platforms involved in tokenized stored-value systems, such as certain stablecoin issuers, will also fall under this jurisdiction. These issuers must adhere to the same standards as other stored-value providers, which include clear policies for redeeming value and protecting customer assets.
Authorities emphasized that this strategy would “address the unique risks posed by [Digital Asset Platforms] and Tokenized SVFs,” incorporating additional disclosure requirements for tokens lacking clear issuers.
However, businesses developing digital assets for non-financial objectives, maintaining infrastructure, or creating blockchain software will not be subject to these new regulations.
Smaller and early-stage platforms might be exempt from full licensing obligations, although they could still be required to comply with some tailored rules as indicated in the policy document.
Stablecoins utilized for transactions will be regulated similarly to traditional non-cash payment systems, classifying them as stored-value facilities within the broader payment reform framework.
However, trading these tokens or listing them on secondary markets will not inherently classify as financial transactions. Platforms facilitating such trades will not be regarded as financial markets solely based on their listing of stablecoins or wrapped tokens.
A draft legislation is anticipated to be released in 2025, with specific rollout dates to be determined after finalizing the legislation.
Tackling De-banking in Australia
The government is also addressing the escalating issue of de-banking, where crypto businesses struggle to obtain banking services. Officials stated they are collaborating with major banks in Australia to “understand the scope and nature of de-banking.”
Over recent years, de-banking has posed significant challenges for crypto companies in Australia, with major institutions like Commonwealth Bank, Westpac, NAB, and HSBC Australia either pulling or restricting services to these firms.
“De-banking can seriously harm businesses and individuals affected. It may also hinder competition and innovation within the financial services industry and adversely impact Australia’s economy,” officials pointed out, further stating that the proposed framework aims to enhance risk management across the crypto landscape, thereby bolstering trust with banks.
Looking ahead, regulators will also investigate how tokenization may transform asset markets, evaluate crypto tax reporting standards, monitor developments in DeFi, and consider the potential advantages of a central bank digital currency for Australia’s financial system.