In a significant regulatory move, Australia’s financial watchdog has redefined the landscape of digital assets by classifying stablecoins, tokenized securities, and digital asset wallets as financial products. The Australian Securities and Investments Commission (ASIC) has mandated that enterprises engaged in offering these assets must now obtain a financial services license, thereby bringing them in line with traditional financial service providers.
This update, announced on October 29, 2025, reflects the ASIC’s ongoing efforts to establish a comprehensive regulatory framework for cryptocurrencies and digital financial products. Companies will need to be licensed under the Australian Financial Services License (AFSL) regime, ensuring they adhere to the same rigorous standards that govern conventional financial markets.
ASIC Commissioner Alan Kirkland commented on the new regulatory clarity, stating that many popular digital assets qualify as financial products under existing laws, necessitating that a substantial number of providers acquire the requisite licenses. This move aims to enhance consumer protection and empower ASIC to take effective action when necessary.
Transitional Relief for Businesses
To ease the transition into this new regulatory framework, ASIC has introduced a sector-wide “no-action” relief that will remain in effect until June 30, 2026. This reprieve offers businesses a grace period during which they will not face enforcement actions for operating without a license, provided they are actively pursuing compliance.
The relief period is designed to allow service providers adequate time to comprehend the new classifications, seek proper licenses, and implement essential operational adjustments without incurring immediate penalties.
Furthermore, ASIC is contemplating specific relief measures targeting certain distributors and custodians, particularly in relation to stablecoins and wrapped tokens, which are expected to be continued until more comprehensive legislative reforms are finalized.
Consultation and Compliance
ASIC’s decision follows extensive consultations with industry stakeholders over nearly a year. In December 2024, the regulator solicited feedback on how existing financial laws should apply to crypto products, particularly focusing on the definitions and treatment of stablecoins and wrapped tokens.
In response to requests for greater clarity, ASIC has adjusted its guidance and implemented specific relief conditions based on industry feedback. Simultaneously, the Australian Treasury is drafting new legislation that will require crypto exchanges and service providers to obtain licensing, thereby aiming to fortify the regulatory environment and alleviate uncertainties surrounding digital asset compliance.
Streamlining Market Entry for Stablecoin Intermediaries
In September 2025, ASIC introduced a class exemption allowing licensed financial intermediaries to distribute stablecoins without needing additional approvals, simplifying market entry for firms already operating under the AFSL framework. This exemption aimed to streamline compliance for existing players while maintaining basic regulatory standards.
Ahead of anticipated law reforms, ASIC’s latest updates align with a proactive strategy to foster a well-regulated market that incorporates both traditional and digital finance products. By ensuring that digital assets are treated with the same level of scrutiny as conventional financial instruments, ASIC is positioning Australia as a front-runner in establishing a balanced and secure crypto regulatory landscape.
The ongoing developments reflect an acknowledgment of the growing significance of digital assets in the financial ecosystem and mark a pivotal step in Australia’s journey towards comprehensive crypto regulation.
