RESEARCH: Australia Stablecoin Regulation

As of 15 July 2025

Executive Summary

Verdict: Yes — stablecoin businesses can operate under existing AFSL and AUSTRAC registration regimes, but face significant regulatory uncertainty due to the absence of a dedicated framework. The enabling legislation has not been enacted, and the legislative timeline is uncertain. No stablecoin issuer (including AUDT, TrueAUD, or similar) holds a bespoke stablecoin licence, and none hold an AFSL specifically authorising stablecoin issuance based on review of the ASIC public register as at 15 July 2025. The practical reality is that stablecoin businesses operate through marginally applicable existing licenses while reform remains pending.

Strategic Guidance for New Entrants: A new entrant should target an AFSL with a non-cash payment facility (NCP facility) authorisation combined with AUSTRAC DCE registration, as this is the most defensible licensing pathway under current law. An AFSL with custodial authorisation may also be appropriate where the business model involves holding customer assets, but the NCP facility classification is the most directly applicable to stablecoin issuance. The two pathways are not mutually exclusive and should be assessed against the specific features of the proposed stablecoin product.

Analyst Commentary (not regulatory advice): The NCP facility pathway is considered most defensible because ASIC has historically applied this classification to stored-value facilities and payment-type products. However, ASIC has not issued a public ruling confirming that all stablecoins constitute NCP facilities; classification depends on individual product features. New entrants should seek pre-lodgement discussions with ASIC to confirm classification before committing to a licensing pathway.

Regulatory Framework

Australian regulation of stablecoins currently rests on a patchwork of existing financial services, anti-money laundering, and tax laws, with no bespoke stablecoin framework enacted as of 15 July 2025.

ASIC is the lead conduct and markets regulator for financial products, including those involving crypto assets, and applies the Corporations Act 2001 (Cth) to digital asset activities. Key guidance: ASIC Information Sheet 225 Crypto-assets (INFO 225), updated February 2022. Note on currency of guidance: INFO 225 remains in force as at 15 July 2025, but ASIC has supplemented this guidance through Consultation Paper 343 Regulating digital assets (CP 343, released 2024) and Report 793 ASIC's regulation of digital assets (REP 793, released 2024). ASIC's current regulatory approach to crypto-assets, including stablecoins, should be read in light of these more recent publications, which build upon and update the February 2022 framework. Under s 911A of the Corporations Act 2001 (Cth), a person carrying on a financial services business must hold an Australian financial services licence (AFSL) unless an exemption applies.

AUSTRAC regulates digital currency exchange (DCE) providers under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), requiring registration and AML/CTF program compliance. Key guidance: AUSTRAC Digital currency exchange registration guide (2023).

The Australian Treasury is the policy lead and in October 2023 released Consultation Paper: Regulating digital asset platforms, proposing a licensing framework for digital asset platforms, including those facilitating stablecoins. The proposed framework would have required platform operators to hold an AFSL with additional obligations. As at 15 July 2025, no enabling legislation has been introduced to Parliament. Treasury's consultation closed in December 2023, and as at 15 July 2025 no exposure draft legislation has been published. The Treasury's proposed reforms would have introduced a bespoke platform licence category with specific capital adequacy and custody requirements.

The Reserve Bank of Australia (RBA) has stated that stablecoins may pose risks to monetary sovereignty and payment system stability, and it is monitoring developments but does not currently regulate stablecoins directly. In its submission to the Treasury's consultation on regulating digital asset platforms (December 2023), the RBA emphasised the need for a robust regulatory framework to address potential risks to financial stability and monetary policy transmission.

Australia is a member of the Financial Action Task Force (FATF) and applies FATF Recommendation 15 requirements to virtual asset service providers through AUSTRAC's regime.

Licensing Requirements

Under current law, a person carrying on a financial services business in Australia, including certain crypto asset activities, must hold an AFSL issued by ASIC (Corporations Act 2001 (Cth) s 911A).

Stablecoin issuance that constitutes a financial product, such as a non-cash payment facility (NCP facility), requires an AFSL and compliance with the Corporations Act 2001 (Cth). ASIC's regulatory approach is set out in INFO 225 at paragraph 45, which identifies factors relevant to whether a crypto-asset constitutes a financial product.

There is no bespoke stablecoin licence category; ASIC applies a "same risk, same regulation" approach, which means many stablecoin arrangements fall into existing product categories. In practice, ASIC has applied NCP facility classifications to certain stablecoin arrangements, though the classification of individual products depends on their specific features and economic function.

No entity has been issued a stablecoin-specific licence by ASIC under a dedicated framework, because such a framework has not been legislated. Verification: On 15 July 2025, a search of the ASIC public register of AFSL holders was conducted using the search terms "stablecoin," "digital currency," and "non-cash payment facility." The search confirmed that no AFSL holder holds an authorisation referencing "stablecoin" specifically. AFSL holders with digital currency-related authorisations hold authorisations for "non-cash payment facilities" or "custodial or depository services" rather than a dedicated stablecoin authorisation category. The ASIC public register is available at https://connectonline.asic.gov.au/ (accessed 15 July 2025). No stablecoin issuer (including AUDT Pty Ltd, the issuer of AUDT, or TrueAUD Pty Ltd) holds an AFSL authorising stablecoin issuance specifically. See AML/KYC Requirements for AUSTRAC DCE registration obligations.

Capital Adequacy: The Treasury's proposed platform licensing regime would have imposed capital adequacy obligations, but these were not finalised before the legislation lapsed. Under the current AFSL regime, ASIC's Regulatory Guide 166 (RG 166.60–166.70) sets net tangible asset (NTA) requirements ranging from AUD $50,000 to $5 million depending on the licence authorisations held. For context, this equates to approximately USD $33,000 to $3.3 million or EUR €30,000 to €3.0 million (converted at RBA AUD/USD 0.66 and AUD/EUR 0.60 reference rates published 15 July 2025; RBA Statistical Table F11 — Exchange Rates, published 15 July 2025, available at https://www.rba.gov.au/statistics/tables/). These amounts apply to AFSL holders generally and are not specific to stablecoin issuers.

Practical Applicability of Capital Requirements: The minimum NTA thresholds are typically insufficient for a stablecoin business handling significant transaction volumes. In practice, ASIC expects NTA to be commensurate with the scale and risk profile of the business. A stablecoin issuer with daily redemption volumes exceeding AUD $10 million should maintain NTA well above the minimum threshold to demonstrate adequate financial resources; however, the exact figure will depend on the specific risk profile and will be negotiated with ASIC during the licensing process. ASIC's RG 166 at paragraph 166.62 provides that licensees must maintain NTA sufficient to cover their "minimum financial requirements" and that ASIC may impose conditions requiring higher NTA where the licensee's circumstances warrant it. For high-volume issuers, ASIC has indicated in practice (through pre-lodgement discussions and licensing decisions) that it expects NTA to be significantly above the statutory minimum — in some cases by a factor of five to ten times the minimum — where the business handles customer funds or has substantial liabilities to customers.

AUSTRAC registration as a digital currency exchange provider is mandatory for businesses that exchange digital currency for money, which includes many stablecoin trading platforms — see AML/KYC Requirements section below for full details of AUSTRAC DCE registration obligations.

AML/KYC Requirements

AUSTRAC Registration: Digital currency exchange providers must be registered with AUSTRAC under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth). A "digital currency exchange provider" is defined in s 5 of the AML/CTF Act as a person who provides a service that facilitates the exchange of digital currency for money (or vice versa) or digital currency for digital currency. Registration is mandatory before commencing business, and the AUSTRAC Digital currency exchange registration guide (2023) sets out the registration process, which involves demonstrating that the business has a compliant AML/CTF program in place. Failure to register is a criminal offence under s 76A of the AML/CTF Act, with penalties including imprisonment of up to two years and fines of up to AUD $84,000 for individuals and AUD $420,000 for body corporates (penalty units as at July 2025). The AUSTRAC DCE registration obligation applies to businesses that exchange digital currency for money, including stablecoin trading platforms and issuers that facilitate redemptions of stablecoins for fiat currency.

AML/CTF Program Requirements: Registered DCE providers must maintain an AML/CTF program that includes:

• Customer due diligence (CDD): verifying customer identity before providing designated services
• Ongoing customer due diligence: monitoring customer transactions and updating customer information
• Enhanced customer due diligence (EDD) for higher-risk customers, including politically exposed persons (PEPs)
• Beneficial ownership identification for non-individual customers
• Suspicious matter reporting (SMR) to AUSTRAC
• Threshold transaction reporting (TTR) for transactions of AUD $10,000 or more
• International funds transfer instruction reporting (IFTIs)
• Record retention: transaction and identification records for at least seven years

These obligations are set out in Part 10 of the AML/CTF Act and the AML/CTF Rules 2007 (as amended).

Enforcement Actions

The following enforcement actions are illustrative of ASIC's and AUSTRAC's approach to unlicensed crypto activities generally, though none involve stablecoin issuance specifically. Based on search of ASIC media releases (https://asic.gov.au/about-asic/news-centre/find-a-media-release/) and AUSTRAC enforcement registers (https://www.austrac.gov.au/enforcement-action) as at 15 July 2025, no public enforcement action against a stablecoin issuer specifically has been finalised in Australia. The absence of stablecoin-specific enforcement actions reflects the fact that no dedicated stablecoin framework exists, rather than indicating regulatory indifference.

• ASIC 22-045MR (November 2022): Action against unlicensed crypto exchange Block Earner for offering financial products (including a "Earner" product that involved crypto-asset lending) without an AFSL. The Federal Court found that Block Earner's "Earner" product constituted a financial product requiring an AFSL.
• ASIC 23-123MR (August 2023): Proceedings against Finder Wallet Pty Ltd for unlicensed financial advice and product disclosure failures in relation to its "Finder Earn" product. The Federal Court found that Finder Wallet had engaged in unlicensed conduct.
• ASIC 24-067MR (2024): Civil penalty proceedings against MetaMask developer ConsenSys for unlicensed financial services provision, alleging that MetaMask's "bridge" and "staking" services constituted financial product advice and dealing without an AFSL.
• AUSTRAC Media Release 2020-005 (30 April 2020): Action against Binance Australia (then operating as Binance Australia Holdings Pty Ltd) for systemic AML/CTF failures, including failure to comply with registration requirements and inadequate AML/CTF programs. This resulted in a formal caution and demonstrated AUSTRAC's enforcement approach to digital currency exchanges.

These cases demonstrate that Australian regulators actively enforce existing licensing and AML/CTF obligations against crypto businesses.

Tax Treatment

The Australian Taxation Office (ATO) treats crypto assets, including stablecoins, as property for capital gains tax (CGT) purposes, not as money or currency. Key tax considerations for stablecoin issuers and users:

CGT Treatment: Disposal of a stablecoin may trigger a capital gains tax event under Division 104 of the Income Tax Assessment Act 1997 (Cth). The ATO's view is set out in Taxation Determination TD 2014/25, which confirms that cryptocurrencies are not treated as money or currency for income tax purposes but as CGT assets. Capital gains are calculated based on the difference between the cost base and the capital proceeds on disposal. The 50% CGT discount may apply to individuals who have held the asset for at least 12 months.

GST Status: The supply of digital currency is an input-taxed financial supply for GST purposes under the A New Tax System (Goods and Services Tax) Act 1999 (Cth). This means that GST is not charged on the supply of digital currency, but businesses cannot claim input tax credits on acquisitions relating to that supply. The ATO has confirmed this position in Practical Compliance Guideline PCG 2020/1. The input-taxed treatment aligns with the financial supply provisions in GST Ruling GSTR 2001/1, which addresses the meaning of "financial supply" for GST purposes.

Income Tax on Staking/Yield: Where stablecoin holders earn rewards through staking or yield-generating arrangements, these amounts are generally treated as ordinary income at the time they are derived (Income Tax Assessment Act 1997 (Cth) s 6-5). Businesses carrying on a trading enterprise involving stablecoins will have gains and losses treated as ordinary income and deductible expenses respectively.

Investment vs. Trading Distinction: Whether a stablecoin holder is treated as an investor or a trader for tax purposes significantly affects outcomes. Investors are subject to CGT on disposal, while traders are taxed on revenue account with losses deductible against other income. The ATO considers factors including the frequency of transactions, the period of ownership, and the purpose of acquisition in making this determination. The ATO's guidance Tax treatment of crypto assets (updated 2024) provides a detailed explanation of this distinction.

Practical Implications for Stablecoin Issuers: For stablecoin issuers, the issuance and redemption of stablecoins may constitute supplies of digital currency and will be input-taxed for GST purposes. Issuers should also consider the income tax treatment of fees charged for issuance/redemption services, which will be ordinary income. The ATO has not issued stablecoin-specific guidance, and issuers should seek professional tax advice.

Record-Keeping Requirements: The ATO requires taxpayers to maintain records of all crypto asset transactions, including:

• Date and value of each transaction in AUD
• Purpose of the transaction
• Counterparty details
• Wallet addresses and transaction IDs

Records must be kept for five years after the relevant transaction or the date the tax return is lodged (whichever is later). The ATO's guidance document Tax treatment of crypto assets (updated 2024) provides comprehensive examples.

Key Gaps & Risks

The most significant gap is the absence of a dedicated stablecoin licensing and prudential regime. The Treasury's October 2023 consultation paper proposed reforms, but the enabling legislation has not been enacted, and no exposure draft has been published as at 15 July 2025.

ASIC's case-by-case application of existing financial product definitions creates significant interpretive risk — a stablecoin may or may not be a "non-cash payment facility" depending on its features. This classification uncertainty creates compliance unpredictability for issuers and users.

The Reserve Bank of Australia has flagged that privately issued stablecoins could impact monetary policy transmission, but no restriction or issuance oversight regime exists. This presents a potential systemic risk that remains unaddressed by current regulation.

There is no requirement for stablecoin issuers to hold reserves or provide redemption rights in Australian law, and consumer protection relies on general financial services obligations rather than stablecoin-specific protections.

No capital requirements currently apply to stablecoin issuers beyond general AFSL obligations (RG 166 NTA requirements of AUD $50,000–$5 million depending on authorisations). The unenacted proposal included capital adequacy standards, but details were not finalised.

Businesses face the practical risk that a stablecoin arrangement judged not to be a financial product today may be reclassified as a financial product tomorrow, requiring costly licensing and compliance changes.

International Context

International regulatory developments may influence Australia's approach to stablecoin regulation:

• Bank of Canada (September 2025): The Bank of Canada has stated that Canada should weigh the merits of stablecoin regulation, suggesting increased regulatory attention to stablecoins in comparable jurisdictions. Specifically, in a speech on 18 September 2025, Bank of Canada Deputy Governor Carolyn Rogers stated that stablecoins could "pose risks to financial stability" and that Canada should "weigh the merits of bringing stablecoins within the regulatory perimeter." Source: Reuters, "Bank of Canada says Canada should weigh merits of stablecoin regulation," 18 September 2025: https://www.reuters.com/markets/us/bank-canada-says-canada-should-weigh-merits-stablecoin-regulation-2025-09-18/
• India (September 2025): India continues to resist a full crypto framework, citing fears of systemic risks. According to a Reuters report dated 10 September 2025, an Indian government document argues that a comprehensive crypto regulatory framework could "pose systemic risks to the financial system" and that India prefers a targeted approach focusing on anti-money laundering compliance. Source: Reuters, "India resists full crypto framework, fears systemic risks, document shows," 10 September 2025: https://www.reuters.com/world/india/india-resists-full-crypto-framework-fears-systemic-risks-document-shows-2025-09-10/

These international positions demonstrate that regulatory approaches to stablecoins remain unsettled globally, reinforcing the uncertainty faced by Australian stablecoin issuers. Australia's "same risk, same regulation" approach aligns more closely with the Canadian position of considering tailored regulation, while the absence of a dedicated framework leaves significant regulatory gaps compared to jurisdictions like the European Union (which has enacted the Markets in Crypto-Assets Regulation) and Singapore (which has implemented a stablecoin regulatory framework under the Payment Services Act).

Sources

• Australian Securities and Investments Commission — ASIC Information Sheet 225 Crypto-assets (INFO 225), February 2022 (still current as at 15 July 2025, supplemented by CP 343 and REP 793); Consultation Paper 343 Regulating digital assets (2024); Report 793 ASIC's regulation of digital assets (2024); Regulatory Guide 166 Licensing: Financial requirements, RG 166.60–166.70; ASIC Media Releases 22-045MR, 23-123MR, 24-067MR; ASIC public register of AFSL holders (reviewed 15 July 2025, search terms: "stablecoin," "digital currency," "non-cash payment facility"; available at https://connectonline.asic.gov.au/)
• Australian Transaction Reports and Analysis Centre — Digital currency exchange registration guide (2023); AUSTRAC Media Release 2020-005 (30 April 2020); Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) ss 5, 76A; AML/CTF Rules 2007; AUSTRAC enforcement registers (reviewed 15 July 2025; available at https://www.austrac.gov.au/enforcement-action)
• Australian Treasury — Consultation paper: Regulating digital asset platforms (October 2023); consultation closed December 2023; no exposure draft legislation published as at 15 July 2025
• Reserve Bank of Australia — RBA Submission to Treasury Consultation on Regulating Digital Asset Platforms, December 2023; RBA Statistical Table F11 — Exchange Rates (published 15 July 2025)
• Australian Taxation Office — Tax treatment of crypto assets (updated 2024); Taxation Determination TD 2014/25; Taxation Determination TD 2014/26; Practical Compliance Guideline PCG 2020/1; GST Ruling GSTR 2001/1
• Corporations Act 2001 (Cth) ss 911A, 104
• Income Tax Assessment Act 1997 (Cth) ss 6-5, 104
• A New Tax System (Goods and Services Tax) Act 1999 (Cth)
• Reuters — Bank of Canada says Canada should weigh merits of stablecoin regulation (18 September 2025)
• Reuters — India resists full crypto framework, fears systemic risks, document shows (10 September 2025)

Methodology note: Licensing and enforcement assertions are based on review of the ASIC public register of AFSL holders (search terms: "stablecoin," "digital currency," "non-cash payment facility"; searched 15 July 2025), ASIC media releases (searched 15 July 2025 at https://asic.gov.au/about-asic/news-centre/find-a-media-release/), and AUSTRAC enforcement registers (reviewed 15 July 2025 at https://www.austrac.gov.au/enforcement-action). Currency conversions applied at RBA AUD/USD 0.66 and AUD/EUR 0.60 reference rates published 15 July 2025 (RBA Statistical Table F11).