Australia’s Securities and Investment Commission (ASIC) has issued a new instrument that offers a class exemption to intermediaries distributing stablecoins. The exemption allows various entities involved in stablecoin distribution, such as crypto exchanges, to facilitate AFS-licensed stablecoins without requiring a separate license.
The relief is temporary (it expires on June 1, 2028), but it’s expected to play a huge role in promoting innovation while still protecting consumers, even as the AFS prepares broader crypto regulations.
New licensing exemptions for stablecoin distributors
The exemption has been issued under the newly released ASIC Corporations (Stablecoin Distribution Exemption) Instrument 2025/631.
Normally, parties engaging in stablecoin-related activities, whether operating financial markets, providing clearing and settlement services, or offering financial advice, would require three different licenses under the Corporations Act 2001:
- An Australian financial services (AFS) licence.
- An Australian market licence.
- An Australian clearing and settlement (CS) facility licence.
The new instrument exempts intermediaries like crypto exchanges, wallet providers, and payment platforms from the three licenses as long as the stablecoin issuer is licensed by the AFS (essentially regulated by ASIC).
The policy will likely be expanded to other compliant stablecoins in the future, but at the moment, it only applies to the AUDM stablecoin. This is a new stablecoin issued by Catena Digital Pty Ltd, and it’s the first one to hold an Australian financial services (AFS) licence.
Whether or not it will expand to other stablecoins, the instrument gives AUDM the competitive advantage of having a ‘regulatory green light.’ The Australian stablecoin now has a clear pathway to intermediaries like crypto exchanges, as they can exchange it without the cost and burden of obtaining three separate licenses.
The conditions and limits of the exemption measure
The new instrument isn’t a free pass, as it comes with several boundaries that define where and when the relief applies.
The first is that the issuer of the stablecoin itself needs to be licensed by the AFS. This means that at the moment, it only applies to the AUDM. However, in its press release, ASIC stated that “As and when more issuers of eligible stablecoins obtain an AFS licence, ASIC will consider extending the above relief to intermediaries distributing those stablecoins.”
The relief also only applies to intermediaries like exchanges and payment systems, not issuers. The issuer is still required to follow all the core regulatory obligations like managing stablecoin reserves, providing insurance, and meeting strict anti-money laundering (AML) and counter-terrorism financing (CTF) requirements.
At the same time, intermediaries relying on the exemption to issue a stablecoin must ensure that they make available the latest Product Disclosure Statement issued by the issuer of the particular stablecoin.
Lastly, the exemption is temporary and is scheduled to expire on June 1, 2028. It can be extended or replaced by the Treasury’s proposed crypto laws, which are already under consultation. The draft legislation is expected to create a framework that creates certainty for the industry while also keeping Australians safe and secure.
A part of ASIC’s broader guidance on crypto regulation
ASIC’s new relief hasn’t come out of nowhere. The regulator has been in consultations to update its guidance on crypto and digital assets, Information Sheet 225: Crypto-assets. This led to the release of Consultation Paper 381: Updates to INFO 225: Digital assets: Financial products and services (CP 381) in December 2024.
In the paper, there were several proposed changes to how existing financial service laws apply to crypto assets. The paper also asserted that many tokens, especially stablecoins, may fall within the categories of financial products, bringing them under the Corporations Act 2001.
This meant that issuers of stablecoins and distributors were required to hold AFS licenses. However, there were also raised concerns that the distribution of their stablecoins would not be commercially viable if distributors were required to abide by the same strict laws.
This is what has led to the latest relief, as it comes just after the launch of the first AFS-licensed stablecoin.
The consultations on CP 381 were closed in February 2025, and the final updates to INFO 225 are scheduled for fall 2025. ASIC has recently indicated that it’s “very close” to issuing the revised guidance, and it’s expected in the next few weeks. The guidance will provide greater clarity to the crypto industry on how existing financial services laws apply to digital assets.
The motivation behind the exemption
According to ASIC, the regulatory body is “committed to supporting responsible innovation in the rapidly evolving digital assets space, while ensuring important consumer protections are in place by having eligible stablecoins issued under an AFS licence.”
The issuance of this statement comes on a backdrop of several crypto regulatory efforts in Australia, but the AFS has still not come up with a clear framework.
This means that crypto services in Australia have been operating under several regulatory frameworks that were mostly created for traditional finance systems. However, these have been stringent on innovation, and the government is at a point where it needs to support innovation in the digital assets sector.
Several other governments have already made significant efforts to boost innovation and support the issuance of local currency-backed stablecoins.
The U.S. already passed the GENIUS Act, a law that’s set to boost the dominance of USD-backed stablecoins in the international digital market. Hong Kong also passed its stablecoin regulations, and China is expected to do the same in the next few months.
ASIC’s new relief measures are designed to make AUD-backed AUDM more attractive and boost adoption, enhancing the space of the Australian dollar in the digital assets market.
