Australia Introduces Crypto Regulations Targeting Stablecoins and Debanking

Australia’s government, under Prime Minister Anthony Albanese, has initiated a regulatory framework for the digital asset sector. This framework zeroes in on licensing rules for major cryptocurrency platforms, specifically exchanges and stablecoins, and addresses debanking issues within the industry.

Major crypto platforms now need to secure an Australian Financial Services Licence. Smaller businesses not involved in financial services remain exempt. This strategy aligns with regulatory practices in the European Union and Singapore, boosting consumer protection and market integrity in digital asset markets.

The Australian Treasury released the “Developing an Innovative Australian Digital Asset Industry” paper. The document details plans to include digital assets, such as payment stablecoins, within existing financial services laws. This alignment with international standards aims to elevate Australia’s digital asset market’s global standing.

The framework extends to crypto exchanges, custody services, and specific brokerage platforms. Companies dealing with tokenized stored-value facilities, including some stablecoin issuers, will face new licensing and compliance requirements. Entities focused on non-financial digital assets, software development, or digital infrastructure maintenance are not subjected to these obligations.

The government is actively tackling debanking, where financial entities limit services to crypto businesses. By introducing a licensing system, risk management and transparency should improve, potentially reducing debanking by significant financial institutions.

This regulatory move offers essential clarity and removes growth barriers within Australia’s digital economy. Draft legislation will be available for public consultation later this year, with plans to enhance guidance on digital assets through feedback from the Australian Securities and Investments Commission.