Australia to Regulate Crypto Exchanges and Stablecoin Issuers

Australia is set to tighten regulations on crypto exchanges and stablecoin issuers as part of a proposed regulatory overhaul.

The country’s Treasury Department has released a policy paper detailing plans to incorporate key elements of the digital asset sector into existing financial services laws. The paper explains that the new regulations aim to “identify opportunities, manage risks, foster innovation, protect consumers, and maintain market integrity.”

Under the proposed framework, crypto platforms holding digital assets on behalf of customers—including exchanges, custodians, and certain brokerages—will be required to obtain an Australian Financial Services Licence. Additionally, platforms dealing with tokenized stored-value facilities, including some stablecoin issuers, will also fall under the new licensing requirements. These issuers must adhere to the same standards as other stored-value providers, including clear redemption rules and robust measures to safeguard customer assets.

Authorities emphasized that the proposed approach would “address the unique risks of Digital Asset Platforms and Tokenized Stored-Value Facilities.” They also plan to introduce additional disclosure requirements for tokens that lack clear issuers. However, businesses engaged in creating digital assets for non-financial purposes, maintaining blockchain infrastructure, or developing blockchain software will remain outside the scope of the new regulations.

The policy paper also suggests that small-scale and early-stage platforms could be exempt from full licensing requirements. Nevertheless, they may still need to comply with tailored regulatory standards to ensure basic compliance.

As part of the proposed reforms, stablecoins used for payments will be subject to oversight comparable to that of traditional non-cash payment systems, as they will be treated as stored-value facilities. However, trading or dealing in these tokens on secondary markets will not automatically qualify as financial dealing. Furthermore, platforms listing stablecoins or wrapped tokens will not be classified as financial markets solely based on those activities.

A draft law outlining the new regulatory framework is expected to be introduced in 2025, with rollout timelines to be confirmed once the legislation is finalized.

Notably, last year, Australian regulators began drafting legislation to mandate cryptocurrency exchanges to obtain financial services licences. Alan Kirkland, a commissioner at the Australian Securities and Investments Commission (ASIC), announced the move during the AFR Crypto and Digital Assets Summit in Sydney. Kirkland stated that many major cryptocurrencies, including Bitcoin and Ether, fall under the Corporations Act, making licensing essential.

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