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Australia Offers Regulatory Relief for Stablecoin Startups

Australia Offers Regulatory Relief for Stablecoin Startups

Bitget-RWA2025/09/18 09:20
By:Coin World

- Australia's ASIC grants temporary relief to stablecoin intermediaries, easing AFS licensing requirements until 2025 to foster innovation while maintaining safeguards. - The relief applies to fully fiat-backed stablecoin providers, addressing 40% YoY growth in transactions and supporting startups in the fast-expanding market. - Experts praise the move as pragmatic but warn of potential regulatory arbitrage risks if not aligned with international standards. - Unlike the US/UK, Australia lacks a dedicated s

The Australian Securities and Investment Commission (ASIC) has introduced temporary regulatory relief for stablecoin intermediaries, making it easier for them to operate without immediately securing an Australian Financial Services (AFS) license. This initiative is intended to encourage growth in the digital asset industry while still maintaining necessary regulatory protections. During this period, eligible stablecoin providers are not required to meet the usual AFS licensing standards.

ASIC clarified that this measure is only a short-term arrangement, designed to provide the sector with regulatory certainty and allow participants time to meet the ongoing requirements set out in the Corporations Act 2001. The change comes in response to a significant increase in the use of stablecoins across Australia, especially among individual investors and small enterprises looking for efficient, cost-effective transactions.

Internal data from ASIC reveals that activities involving stablecoins have jumped more than 40% year-over-year in Australia, with transaction volumes rising to around A$1.2 billion in the previous quarter. The commission highlighted that these exemptions mainly benefit those issuing, redeeming, or facilitating stablecoin exchanges, provided the coins are fully backed by traditional currency.

This relief will remain in effect until the close of 2025, giving ASIC time to observe changes in the stablecoin sector and determine if a lasting regulatory structure is necessary. The commission affirmed its ongoing commitment to promoting innovation while ensuring consumer safety and financial stability.

Financial technology professionals have generally supported the decision, calling it a sensible adaptation to the rapidly changing digital asset environment. Nonetheless, some are concerned that, unless coordinated with international regulations, the temporary relief may lead to regulatory loopholes. A fintech industry analyst suggested that these changes could make Australia more attractive for new startups.

This regulatory shift is also part of the Australian government’s larger strategy to establish itself as a leader in digital innovation within the region. Earlier in the year, officials began reviewing anti-money laundering and counter-terrorism financing regulations with an emphasis on digital assets. The recently introduced relief is expected to help achieve this goal by lowering entry barriers for new stablecoin firms.

Although AFS licensing requirements are being relaxed, stablecoin service providers are still responsible for fulfilling other rules, including anti-money laundering protocols and transparency obligations. ASIC has also published guidance to assist companies in understanding the limits of this relief, ensuring they do not operate outside its intended boundaries.

This temporary exemption reflects a wider global trend, as seen in countries like the United States and United Kingdom, where authorities have adopted more flexible regulatory approaches for stablecoins in response to escalating market interest. However, Australia has yet to establish a specific regulatory system dedicated to stablecoins, unlike some of its peers.

With the stablecoin industry evolving quickly, ASIC plans to maintain ongoing dialogue with market participants to further develop its regulatory approach. The commission has also shown interest in adopting blockchain solutions for its internal processes, demonstrating a broader willingness to embrace digital advancements.

In its official statement, ASIC reaffirmed its dedication to safeguarding Australian investors while promoting responsible financial technology development. The temporary relief is one of several strategies under consideration to ensure that regulation remains aligned with rapid technological progress.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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