- Australia’s market regulator, ASIC, has granted class relief to secondary distributors of stablecoins issued by Australian Financial Services (AFS) licensed issuers, removing significant regulatory overhead for distributors.
- The relief currently only applies to one stablecoin, AUDM issued by Catena Digital, but ASIC said it may extend the relief as more AFS-licensed issuers enter the Australian market.
- The relief will extend until June 1, 2028, allowing digital asset innovation to continue while more permanent legislative reform takes place.
Secondary distributors of stablecoins, issued by an issuer that holds an Australian Financial Services (AFS) license, have been granted class relief by Australia’s corporate, markets and financial services regulator, the Australian Securities and Investments Commission (ASIC).
Announced on September 18, ASIC said initially the exemption would apply to secondary distributors of the AUDM stablecoin issued by Catena Digital Pty Ltd, but may extend to other distributors as more AFS-licensed stablecoin issuers enter the market.
An executive from Cantena Digital, Delia Burrage, said it would enable wider market participation by making life easier for downstream users of AUDM, like digital currency exchanges and market makers.
ASIC’s decision responds to industry feedback on the cost and compliance burden of existing licensing requirements and acknowledges the need for a flexible approach while Government payment services and digital asset reforms are developed.
Delia Burrage, COO, Cantena DigitalClass relief is a legislative instrument available to ASIC that allows the regulator to provide exemptions to a broad range of individuals or organisations from certain provisions of Australia’s financial services legislation, rather than requiring individual applications for relief.
The granting of class relief means that secondary distributors will no longer be required to obtain market operator, clearing and settlement, or AFS licenses merely to distribute stablecoins issued by AFS-licensed issuers. Distributors affected by this class relief will still be required to provide the stablecoin’s product disclosure statement to their clients.
“ASIC 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,” ASIC said.
As and when more issuers of eligible stablecoins obtain an AFS licence, ASIC will consider extending the above relief to intermediaries distributing those stablecoins.
ASICCEO of the AUDD stablecoin project, Effie Dimitropoulos, said: “This is a strong step forward for Australia’s digital assets ecosystem, creating a clear, regulated pathway for stablecoin innovation.”
The legislative instrument will apply until June 1, 2028, giving stablecoin distributors regulatory cover and allowing digital asset innovation in Australia to continue while permanent legislative reforms are developed. The relief will come into effect as soon as it’s registered on the Federal Registration of Legislation.
Related: AUDD Launches Natively on Hedera, Pioneering Australian Dollar Stablecoin Innovation
Stablecoin Relief Follows Similar Exemptions For Participants In RBA-Led Project Acacia
ASIC’s class relief for stablecoin issuers follows the July announcement by the Reserve Bank of Australia (RBA), Digital Finance Cooperative Research Centre (DFCRC), ASIC and others, of the industry participants in Project Acacia — the Australian government’s initiative to explore the development of a wholesale tokenised asset market.
Similar to its decision on stablecoin class relief, ASIC also opted to grant class relief to all participants in Project Acacia in order to “support and streamline the pilot”.
“ASIC’s relief will support the responsible testing of tokenised asset transactions, in some cases using CBDCs, between participants and a limited number of financial institutions in the coming months,” the RBA said in its announcement.
The Project Acacia industry participants announced in July include several major Australian banks such as Westpac, CommBank and ANZ and smaller financial firms including Catena (the issuer of AUDM), Fireblocks, Zerocap and NotCentralised. It also includes Australian Payments Plus, the organisation behind much of Australia’s domestic payment rails such as eftpos, BPAY and the New Payments Platform, which facilitates PayID and Osko.
Related: RBA Kicks Off Phase Two of Project Acacia with Wholesale CBDC and Tokenisation Trial
Participants in Project Acacia are currently developing their use cases, 19 of which “will involve real money and real asset transactions,” according to the RBA, with a further 5 proof-of-concepts using simulated transactions. The project is scheduled to run until the end of 2025. Blockchain networks used by participants in Project Acacia to develop their use cases include Hedera, R3 Corda and Sydney-based RedBelly.
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