Australia Gives Stablecoin Startups a Regulatory Breathing Space

The Australian Securities and Investment Commission (ASIC) has announced temporary relief measures for stablecoin intermediaries, easing the requirements for obtaining an Australian Financial Services (AFS) license. The relief is part of a broader effort to support innovation in the digital assets sector while maintaining regulatory safeguards. Under the relief, certain stablecoin service providers are now exempt from the standard AFS licensing obligations for a limited period.

ASIC emphasized that the relief is not a permanent solution but is intended to provide regulatory clarity and time for industry participants to comply with ongoing obligations under the Corporations Act 2001. The move follows a rapid expansion of stablecoin usage in Australia, particularly among retail investors and small businesses seeking low-cost, fast transactions.

According to internal ASIC data, stablecoin-related activity in Australia has grown by over 40% year-on-year, with the value of transactions involving stablecoins increasing to approximately A$1.2 billion in the last quarter. The commission noted that the relief applies primarily to entities that issue, redeem, or facilitate the exchange of stablecoins where the stablecoin is fully backed by fiat currency.

The relief period is set to last until the end of 2025, during which time ASIC will continue to monitor developments in the stablecoin market and assess whether a permanent regulatory framework is required. In a statement, ASIC said it remains committed to balancing innovation with consumer protection and financial integrity.

Experts in the financial technology sector have welcomed the move, with some describing it as a pragmatic response to the evolving digital asset landscape. However, there are concerns that the temporary relief could create regulatory arbitrage if not harmonized with broader international standards. One fintech analyst noted that the relief could encourage more startups to establish operations in Australia.

The regulatory adjustments also reflect the Australian government’s broader push to position the country as a regional hub for digital innovation. Earlier this year, the government announced a review of its anti-money laundering and counter-terrorism financing laws, with a focus on digital assets. The new relief measures are expected to support this strategic objective by reducing barriers to entry for emerging stablecoin businesses.

Despite the easing of AFS licensing requirements, stablecoin intermediaries remain subject to other obligations, including anti-money laundering checks and disclosure requirements. ASIC has also issued guidance to help firms understand the boundaries of the relief and ensure they do not engage in activities that fall outside its scope.

The decision to grant temporary relief aligns with a trend seen in other jurisdictions, including the United States and the United Kingdom, where regulators have adopted more flexible approaches to stablecoin operations amid growing demand. However, unlike some international counterparts, Australia has not yet introduced a dedicated regulatory regime for stablecoins.

As the stablecoin market continues to evolve, ASIC has indicated that it will engage with industry stakeholders to refine the regulatory framework. The commission has also expressed interest in leveraging blockchain technology for its own operations, signaling a broader openness to digital innovation.

In its announcement, ASIC reiterated its commitment to protecting Australian investors while supporting the development of responsible financial innovation. The temporary relief, it stated, is one of several measures being explored to ensure the regulatory environment keeps pace with technological advancements.