Australia Proposes Stricter Regulations for Crypto Exchanges and Stablecoin Issuers
Crypto exchanges and stablecoin issuers in Australia may soon be subject to stricter licensing rules as part of a proposed regulatory overhaul. The Treasury recently released a policy paper outlining plans to bring key parts of the digital asset industry under existing financial services laws. The goal of these regulations is to identify opportunities, manage risks, unlock innovation, protect consumers, and uphold market integrity.
Under the proposed framework, crypto platforms that hold digital assets for customers, such as exchanges, custodians, and certain brokerages, will be required to operate under an Australian Financial Services Licence. Additionally, platforms that deal in tokenized stored-value facilities, like some stablecoin issuers, will also need to meet the same requirements as other stored-value providers, including rules for redeeming value and safeguarding customer assets.
The authorities highlighted that this approach will address the unique risks associated with Digital Asset Platforms and Tokenised SVFs, with additional disclosure rules for tokens without clear issuers. However, businesses involved in creating digital assets for non-financial purposes, maintaining infrastructure, or building blockchain software will not fall under the new laws.
While small-scale and early-stage platforms may receive exemptions from full licensing requirements, they will still need to adhere to tailored compliance rules. Stablecoins used for payments will be subject to oversight similar to traditional non-cash payment systems, as they will be treated as stored-value facilities under broader payments reform.
Dealing in stablecoins or trading them on secondary markets will not automatically constitute financial dealing, and platforms involved in such activities will not be considered financial markets simply for listing stablecoins or wrapped tokens. A draft law is expected to be released in 2025, with rollout dates to be confirmed upon finalization of the legislation.
Addressing the issue of de-banking in Australia, the government acknowledged the challenges faced by crypto businesses being denied banking services by major banks. Authorities are working closely with banks to understand the extent and nature of de-banking. De-banking can have a significant impact on businesses and individuals, stifle competition and innovation, and negatively affect the economy. The proposed framework aims to strengthen risk management in the crypto sector and improve trust with banks.
Regulators will also explore how tokenization could transform asset markets, assess crypto tax reporting standards, monitor developments in DeFi, and consider the potential benefits of a central bank digital currency for Australia’s financial system.