Australia’s ASIC Grants Relief for Stablecoin Intermediaries, Eases AFS License Requirements

The Australian Securities and Investments Commission (ASIC) granted class relief for intermediaries distributing stablecoin issued by licensed Australian Financial Services (AFS) providers, exempting them from separate licensing requirements until June 2028.

According to the press release, the first-of-its-kind relief allows distributors to operate without an Australian market, clearing and settlement facility, or additional AFS licenses when handling stablecoins from licensed issuers.

Australia Moving Towards Stablecoin Adoption

ASIC’s instrument specifically names Catena Digital Pty Ltd as the initial qualified issuer for its AUDM stablecoin, with plans to extend relief to additional licensed stablecoin issuers.

The relief requires intermediaries to provide Product Disclosure Statements to retail clients and takes effect once registered on the Federal Register of Legislation.

The regulatory framework emerges from extensive consultation following December 2024 guidance updates that clarified some stablecoins qualify as financial products under current law.

Multiple submissions highlighted compliance costs associated with licensing requirements, with stablecoin issuers indicating distribution would not be commercially viable without intermediary relief.

ASIC positioned the temporary relief as bridging regulatory gaps until the government’s broader digital asset reforms commence, supporting responsible innovation while maintaining consumer protections through licensed issuer requirements.

Regulatory Relief Addresses Commercial Viability Concerns

The exemption responds directly to industry feedback, warning that stablecoin distribution faced significant barriers under existing licensing regimes.

Consultation Paper 381 revealed widespread concerns about compliance costs and regulatory burden for secondary distributors operating under current financial services laws.

Several respondents suggested deferring stablecoin regulation until the government’s proposed payment services and digital asset platform reforms take effect.

ASIC consulted directly with stablecoin issuers and nominated distributors, who confirmed that distribution operations would lack commercial viability without licensing relief for intermediaries.

The instrument exempts distributors from three key licensing requirements when operating financial markets, clearing and settlement facilities, or providing financial services solely because stablecoins qualify as financial products.

Services covered include general advice, dealing, market making, and custodial or depository services for named stablecoins.

According to the Explanatory Statement, the relief extends until June 1, 2028, providing industry certainty during the transition to proposed government reforms.

ASIC emphasized that the temporary nature aligns with the timeline for implementing comprehensive digital asset legislation currently under development.

Distributors must take reasonable steps to provide current Product Disclosure Statements to retail clients as the sole condition for accessing relief.

The requirement maintains consumer protection standards while reducing operational barriers for legitimate stablecoin distribution networks.

Broader Enforcement Campaign Targets Crypto Compliance Failures

The stablecoin relief comes as ASIC is aggressively enforcing regulatory actions against non-compliant crypto operators across Australia.

According to an April report, authorities shut down 95 companies linked to international “pig butchering” schemes after receiving nearly 1,500 victim claims totaling $35.8 million in reported losses.

ASIC continues dismantling an average of 130 scam websites weekly, having disabled over 10,000 malicious platforms, including 7,200 fake investment sites and 1,500 phishing operations.

The regulator recently targeted crypto ATM operators failing to meet anti-money laundering requirements following suspicious activity spikes.

Most recently, AUSTRAC directed Binance Australia to appoint external auditors after identifying “serious concerns” with anti-money laundering and counter-terrorism financing controls.

The mandatory audit requirement stems from compliance issues, including limited independent review scope, high staff turnover, and insufficient local management oversight.

The enforcement pattern on exchanges extends internationally, with European regulators considering penalties against OKX after hackers allegedly laundered $100 million in stolen funds through its platform.

French prosecutors also investigate Binance for alleged money laundering violations connected to drug trafficking and tax fraud across the European Union.

Back in Australia, the authorities contacted 427 registered digital currency exchange providers that appear inactive, warning of potential deregistration for businesses failing to withdraw voluntarily.

Many registered platforms ceased operations but remain listed, creating vulnerabilities that criminals could exploit for legitimacy.

As a result of the ongoing enforcement sweeping, the regulators have uncovered sophisticated money laundering operations exploiting crypto platforms to convert illicit funds.

Queensland authorities recently charged four people over an alleged scheme moving $190 million through legitimate businesses before crypto conversion, restraining $21 million in assets across 17 properties.

Giving this growing “illegal operation,” AUSTRAC plans to launch a publicly searchable register enabling consumers to verify official crypto exchange registration status and regulatory oversight.

The initiative aims to address criminal exploitation of legitimate registrations for fraudulent platform operations targeting unsuspecting investors.

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