Australia has been on a journey to regulate the crypto market, and the efforts have been in overdrive in 2025. The Albanese government is taking the approach of integrating blockchain systems into existing payment infrastructure and AML laws, but it also recognises that traditional rules don’t really fit into emerging technologies.
This has meant updating different sections of existing regulations, and the Treasury and other regulators have also been releasing guidelines to explain how modern payment systems fit into existing regulatory infrastructure.
Australia’s new payments and stablecoin reforms
The latest of these updates is the release of the final update of INFO 225 on 29 October, after consultation closed back in February. Alongside it is a Class No-Action Letter that gives transitional relief, a window that runs to 30 June 2026.
There was also another October update when Treasury released Tranche 1a Exposure Draft Legislation (Payments) as part of the government’s payments licensing reforms. This draft legislation was a follow-up on another update in September, when Parliament passed the Treasury Laws Amendment (Payments System Modernisation) Bill 2025 to bring stablecoins and other modern payment systems within the Payment Systems (Regulation) Act 1998.
What’s changing under the new laws?
The current reform package can be summarised into three aspects that are interlocking. These are the modernisation of payment systems, stablecoin regulations, and digital asset platform regulations.
Modernising Payments Systems
Before 2025, the country was relying on a payment systems law that was drafted in 1998. This means the law captured only methods like bank transfers and cheques, leaving out more modern (and more popular) options such as digital wallets, Buy Now Pay Later (BNPL) services, and crypto-based services like stablecoins.
The Albanese government had been using Treasury and regulatory guidance to include modern systems in the existing laws, but it finally passed the Treasury Laws Amendment (Payments System Modernisation) Bill 2025 in September 2025.
This law significantly strengthens oversight through three main ways:
- The definitions of “payment systems” and “participant” have been broadened to include newer technologies and services like BNPL and crypto.
- New ministerial powers allow the Treasurer to designate specific payment platforms or services as ‘special’. The only consideration is “if they are considered to be of national interest”, it doesn’t matter whether they fall outside the traditional RBA designation criteria.
- There’s now a new civil penalty framework for non-compliance to reduce the threshold for penalties. There’s also a formal process where the RBA and nominated regulators can accept and enforce written undertakings from payment system participants.
To complete this new law, the Treasury released the Tranche 1a Exposure Draft Legislation (Payments) on 9 October 2025. This one focuses on updating the Corporations Act 2001 to introduce a granular AFS licensing regime for payment service providers (PSPs).
The draft legislation does away with the ambiguous ‘Non-Cash Payment Facility (NCPF)’ and introduces three new financial products:
- Stored Value Facility (SVF): e.g., prepaid cards, digital wallets that store funds.
- Tokenised Stored Value Facility (TSVF): A new legal category for stablecoins that reference a single currency.
- Payment Instrument: e.g., a card or facility used to make non-cash transfers.
Now, if an entity issues or wishes to issue any of these financial products, it must hold an Australian Financial Services (AFS) licence.
However, the new draft law takes a graduated approach, with regulatory obligations proportional to the size and nature of the risk. The draft legislation is open to submissions until 6 November 2026.
Stablecoin licensing requirements & exemptions
Since the release of the updated INFO 225 in 2024, stablecoins in Australia have been operating as financial products. This means that they fall under the Corporations Act 2001 and require three different licences:
- An Australian financial services (AFS) licence.
- An Australian market licence.
- An Australian clearing and settlement (CS) facility licence.
Distributors of these products have also been required to have the same licences, but the Treasury issued an exemption instrument for licensed stablecoins in September. This instrument allows distributors to facilitate payments for stablecoins without requiring the above licences, as long as the stablecoin issuer holds an AFS licence.
Tranche 1a Exposure Draft Legislation (Payments) has then seen the creation of a new financial product in the Corporations Act. This is the Tokenised Stored Value Facility (TSVF), a new legal classification for stablecoins that reference a single currency. Essentially, they are the regular stablecoins, such as those backed by the AUD, like AUDM, AUDD, AUDF and A$DC.
However, in this classification, the underlying facility and the right to redeem it are the product, not the stablecoin itself. The issuers of a TSVF will now be required to hold an Australian Financial Services (AFS) licence with an authorisation to deal in, or issue, the TSVF product.
That said, there’s also a new Class No-Action Letter (INFO 225) that allows digital assets that are financial products (including stablecoins) to continue operating until 30 June 2026. The condition is that the firm needs to show that it’s taking the right steps to obtain an AFSL.
Digital asset platform licensing
As operators of payment systems, crypto service providers have also been a key part of the ongoing reforms. The Treasury Laws Amendment (Regulating Digital Asset and Tokenised Custody Platforms) Bill 2025 groups these service providers into Digital Asset Platforms (DAPs) and Tokenised Custody Platforms (TCPs), then requires them to hold AFSL licences.
Smaller operators have been exempted if they don’t exceed A$5,000 in total assets and their preceding 12 months do not exceed A$10 million. However, they need to notify ASIC if they intend to rely on the exemption.
Implications for issuers and the fintech industry
As always, reforms introduce complexity. However, they also help create a more mature, secure, and internationally competitive market, which is what the Albanese government is aiming for.
At the moment, stablecoin issuers, DAPs, TCPs, and related firms will have to deal with compliance complexity, which is quite expensive. Most will need to overhaul their systems, and as we’ve seen with Tether in Europe, some will have to exit the market.However, this is also an opportunity for growth as compliance boosts investor confidence. The government has already shown that by issuing a licensing exemption for AUDM, and it has also given service providers more time to work towards compliance. The transitional relief until June 2026 provides a crucial window for the market and the various players.
