The Australian Securities and Investment Commission (ASIC) has provided a major class relief to the operators of financial market infrastructure that distribute stablecoins. This interim relief would prevent distributors from having to obtain an additional license, thereby reducing administrative burden. The exemption is limited to stablecoins issued by licensed Australian Financial Services (AFS) licensees, in respect of which relief is provided for up until June 2028.
The exemption eases worries over the onerous compliance cost surrounding current licensing mandates. Several stablecoin issuers said they would not be able to distribute their coins without the above-mentioned exemption.
Source: ASIC
Catena Digital Pty Ltd has the honour of being the first issuer to take advantage of this relief with its AUDM stablecoin satisfying the new guidelines. Other licensed stablecoin issuers may also be eligible, according to ASIC.
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The relief is targeted at promoting responsible innovation while preserving the safeguards adopted by state and local authorities, the word document said. Distributors will still need to provide retail clients with PDS documents in order for the market to continue to operate efficiently.
The relief is part of ASIC’s larger push to make it easier for stablecoins to operate. It also is viewed as a bridge until the government completes broader digital asset reforms. The temporary respite also helps prop up the stablecoin market while making sure that issuers continue to be held accountable to already existing regulation. ASIC is aiming to balance the need for innovation with consumer protection.
Stablecoin distributors have faced regulatory hurdles for some time. The costs of complying to various licenses have been a common headache.
The new regulations carve out three major licensing requirements for distributors to be exempt from. This includes running financial markets, clearing and settlement services, and other financial services based on stablecoins. The aim is to make providing and distributing coins commercially more feasible while maintaining regulatory supervision.
ASIC’s announcement also demonstrates it remaining proactive in the face of non-compliance within the crypto industry. The regulator has taken a hard line on bad actors in the crypto space. In April ASIC closed 95 companies associated with overseas scam articles. These included “pig butching” operations which took millions of dollars from consumers.
Further more, the ASIC has been further clamping down rogue crypto platforms. It takes down about 130 scam websites a week. In the last year it closed down more than 10,000 fraudulent platforms. These are fake investment sites and phishing activities aimed at falling under the radar of naïve investors.
Meanwhile, international regulators are increasing their focus on cryptocurrency platforms as well. European regulators are investigating exchanges such as OKX over their role in laundering stolen funds. French prosecutors are investigating Binance’s suspected investment in money laundering from drug trafficking and tax evasion.
Meanwhile in Australia, officials are moving to shut down dormant digital currency exchanges. ASIC has contacted 427 exchanges that are registered but seem to be doing nothing. The exchanges may be at risk of deregistration if they don’t follow the rules. Accordingly, the Australian government is concentrating on protecting legitimate crypto platforms from being used for criminal purposes.
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