Australia's new draft legislation, released on September 25, 2025, classifies stablecoins and wrapped tokens as financial products, requiring an Australian Financial Services Licence (AFSL).
This regulatory step could redefine operations for exchanges and issuers, increasing compliance costs, and possibly leading to market realignments.
Australia Classifies Stablecoins as Financial Products
Australia’s draft legislation classifies stablecoins and wrapped tokens as financial products under updated rules. Issuers and trading platforms must now obtain an Australian Financial Services Licence (AFSL) and meet industry standards similar to traditional financial institutions.
The Australian Treasury and ASIC spearheaded this initiative, requiring digital asset platforms to act like regulated financial institutions. Key players include centralized exchanges, custodians, and stablecoin issuers now directly influenced by the shift.
"Crypto operators must act like financial institutions..." indicating the depth of change expected for the sector. — Treasury, Official draft legislation
Compliance Costs Rise for Stablecoin Issuers
This legislation could increase compliance costs for stablecoin creators and digital platforms. Institutional involvement may rise due to transparent guidelines. However, affected businesses must adapt quickly to these comprehensive regulatory standards or consider exiting the market.
Compliance burdens may affect overall crypto market dynamics in Australia. Historical comparisons suggest regulatory clarity may encourage institutional participation, though past shifts have led to delistings and market adjustments. Centralized entities face heightened regulatory scrutiny in maintaining compliance.
Australia's Move Mirrors Global Regulatory Trends
Australia’s move aligns with global trends seen in the EU and Singapore, which have enacted similar regulations for digital assets. These precedents often led to structural shifts within the industry, showcasing potential outcomes for the Australian crypto market.
Experts indicate that stablecoin issuers and crypto platforms must navigate new regulatory landscapes. Those linked to staking or yield features are under increased scrutiny, potentially reshaping market strategies as highlighted by recent international regulatory precedents.