Australia’s ASIC cuts compliance burden for stablecoin intermediaries

In a groundbreaking move for the Australian financial landscape, the Australian Securities and Investments Commission (ASIC) has unveiled a special exemption that allows stablecoin intermediaries to distribute licensed stablecoins without needing an additional financial services license. This unprecedented regulatory development promises to significantly boost innovation in the country’s digital asset sector.

ASIC elaborated that this exemption represents a pivotal advance in fostering growth and innovation within the digital asset and payment sectors, specifically for stablecoins issued by entities possessing the requisite Australian financial services license.

By implementing this exemption, crypto exchanges and other intermediaries can reduce compliance costs while still providing access to certain regulated stablecoins, eliminating the need for extra licensing.

“ASIC is dedicated to promoting responsible innovation in the rapidly changing digital asset environment while ensuring that crucial consumer protections are upheld through requiring that eligible stablecoins are issued under an AFS license,” the regulator stated.

To date, Catena Digital is the only Australian issuer that has obtained an AFS license, making its Australian dollar-pegged stablecoin, AUDM, the first to qualify for the new exemption.

Nonetheless, any intermediaries distributing AUDM will be obligated to present a product disclosure statement to clients, ensuring transparency and empowering consumers to make informed decisions.

ASIC has indicated an intention to extend this regulatory relief to other stablecoin issuers as they secure licensing in the future.

This relief will take effect once registered on the Federal Register of Legislation, a legal prerequisite for its enactment.

ASIC’s Commitment to Formalizing Crypto Regulations

This exemption aligns with ASIC’s response to concerns voiced during the crypto regulation consultation, detailed in Consultation Paper 381, released late last year.

“Numerous digital assets and associated products are categorized as financial products under existing law. Stakeholders have sought enhanced clarity, and in response, we are publishing our draft updated guidance,” noted ASIC commissioner Alan Kirkland.

The consultation paper proposed updates to the existing digital asset guidance document, INFO 225, aimed at better accommodating diverse digital assets. It included practical examples demonstrating how current financial product definitions could be applied to stablecoins, wrapped tokens, exchange-native tokens, and even meme coins.

Currently, ASIC is in the process of finalizing these updates and intends to release the revised INFO 225 along with essential themes and public submissions from the consultation within the upcoming weeks. Concurrently, the regulator is closely collaborating with the nation’s Treasury to construct a comprehensive stablecoin framework.