Australian government proposes regulations for crypto exchanges and stablecoin issuers

crypto exchanges and stablecoin issuers in Australia could soon face stricter licensing rules under a proposed regulatory shake-up.

On March 20, the Treasury released a new policy paper outlining plans to bring key parts of the digital asset industry under existing financial services laws.

According to authorities, the regulations would help “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 need to operate under an Australian Financial Services Licence.

Platforms that deal in tokenized stored-value facilities, such as some stablecoin issuers, will also be brought into the fold. These issuers will need to meet the same requirements as other stored-value providers, including clear rules for redeeming value and safeguarding customer assets.

Authorities noted that this approach would “address the unique risks of [Digital Asset Platforms] and Tokenised SVFs,” with additional disclosure rules to be implemented for tokens that don’t have clear issuers.

However, businesses that create digital assets for non-financial purposes, maintain infrastructure or build blockchain software won’t be regulated under the new laws.

Small-scale and early-stage platforms could also get a pass from full licensing requirements, though they may still need to meet some tailored compliance rules according to the policy paper.

Stablecoins used for payments will face oversight similar to that of traditional non-cash payment systems, as they’ll be treated as stored-value facilities under the broader payments reform.

However, dealing in these tokens or trading them on secondary markets won’t automatically count as financial dealing. The platforms involved in such trades won’t be considered financial markets simply because they list stablecoins or wrapped tokens.

A draft law is expected to drop sometime in 2025, with rollout dates to be confirmed once the legislation is finalized.

Addressing debanking in Australia

The government also addressed the growing problem of de-banking, where crypto businesses are denied banking services. Officials said they’re working closely with Australia’s major banks to “understand the extent and nature of de-banking.”

In recent years, de-banking has become a major headache for crypto firms in Australia, with big players like Commonwealth Bank, Westpac, NAB, and HSBC Australia cutting off or restricting services to such entities.

“De-banking can have a devastating impact on de-banked businesses and individuals. It can also stifle competition and innovation in the financial services sector and negatively impact Australia’s economy,” authorities noted, adding that the proposed framework would strengthen risk management across the crypto sector and, in turn, improve trust with banks.

Looking ahead, regulators will also explore how tokenisation could reshape asset markets, assess crypto tax reporting standards, monitor DeFi developments, and weigh the potential benefits of a central bank digital currency for Australia’s financial system.