Notably, on Thursday, 25 September 2025, the Treasury released exposure draft legislation in respect of licensing of digital asset platforms (Exposure Draft Legislation). HWLE will publish a separate article on this significant development for the Australian digital assets industry.

In the meantime, while this exposure draft legislation progresses towards implementation, the Australian Securities and Investments Commission (ASIC) has taken a significant step toward fostering innovation in financial services with the granting of an Australian Financial Services License (AFSL) to an Australia issuer of stablecoin and making of the “first-of-its-kind” ASIC Corporations (Stablecoin Distribution Exemption) Instrument 2025/631 (Instrument).

While this Instrument is currently limited to certain distribution conduct in relation to a single “Named Stablecoin”, it creates a framework under which further licensing and associated reliefs can be provided for other stablecoins and issuers in the future.

This move comes alongside the release of the Exposure Draft Legislation, other initiatives and statements by the government and financial regulators including ASIC and the Reserve Bank of Australia (RBA), as well as developments in other regulatory areas such as the AML/CTF laws.

AUDM and the ASIC Instrument

Under the relief granted by the Instrument, distributors are not required to hold their own AFSL, or market or clearing and settlement facility licences when engaging in certain distribution conduct in relation to the “Named Stablecoin”. Distributors relying on this relief must still satisfy certain disclosure requirements when distributing to retail clients. Currently, there is only one “Named Stablecoin” being the AUDM stablecoin issued by Catena Digital Pty Ltd (trading as Macropod Global).

The relief applies to a range of distribution conduct including general advice, market making, dealing in (but not issuing), and custodial services in relation to the “Named Stablecoin”.

The Instrument sunsets on 1 June 2028. ASIC has indicated that it is open to consider extending this first-of-its-kind relief to other appropriate issuers and stablecoins as more stablecoin issuers obtain an AFS licence.

Clear regulatory shift on digital assets

The release of this Instrument aligns with ASIC’s broader strategic direction outlined in its 2025-2026 Corporate Plan, which identifies “tokenisation and supporting transition to digital asset reforms” as a focus area in the coming years. ASIC recognises that the structural changes in Australia’s capital markets calls for stronger support for innovation involving digital assets (including in respect of tokenisation). ASIC is actively working with domestic and international partners to support this development.

ASIC’s plan includes efforts to:

• finalise updates to its guidance on digital assets and related products;
• assist Treasury with law reform and transition; and
• promote responsible innovation through its Innovation Hub and the Enhanced Regulatory Sandbox.

ASIC’s attitude towards innovation in financial services is shared among other financial regulators and is already bearing fruit in the form of progression on a number of key legislative reforms in the sector, including the recent passing of the Treasury Laws Amendment (Payments System Modernisation) Bill 2025, and the release of the exposure draft bill on the digital asset platform reform by the Treasury (watch this space as we will publish a separate article on this).

In late 2024, the RBA started work on Project Acacia, a joint initiative with the Digital Finance Cooperative Research Centre to explore how different forms of digital assets and associated infrastructure (including wholesale central bank digital currencies) could support the development of wholesale tokenised asset markets in Australia.

Project Acacia is currently in its experimental phase, where selected industry participants are collaborating to test settlement models for tokenised transactions with 19 pilot use cases which involve real money and real asset transactions and 5 proof-of-concept use cases with simulated transactions. RBA expects to report on the findings from this phase in the first quarter of 2026.

Earlier this year, the Australian Government published a statement on the development of an Australian digital industry. In this statement, the Government expressed a clear desire to “make Australia a leader in the global digital asset ecosystem”.

What does it mean for industry stakeholders?

For fintechs, digital asset platforms, and other financial service providers, the implications of these developments are significant. These include:

• Regulatory support for stablecoin distribution: with the potential expansion of the Instrument to other stablecoins, regulatory burden associated with distribution of those stablecoins could be significantly lower than previously thought;
• Clear legal framework leading to more acceptance: with the development of further legal framework in the industry, stakeholders will potentially see broader acceptance and integration by mainstream financial sector leading to greater adoption and investment in the sector; and
• Fertile ground for other innovations: the shift in the regulator’s attitude towards innovation creates a strong basis for stakeholders to test new ideas and engage with regulators.

If you have any questions about how digital assets are regulated in Australia, or what the future might hold, please contact us.

This article was written by Mizu Ardra, Partner, Chenjie Ma, Senior Associate, and Jordan Donaldson, Solicitor.