ASIC Corporations (Stablecoin and Wrapped Token Relief) Instrument 2025/867

Explanatory Statement

ASIC Corporations (Stablecoin and Wrapped Token) Instrument 2025/867

This is the Explanatory Statement for ASIC Corporations (Stablecoin and Wrapped Token) Instrument 2025/867.

The Explanatory Statement is approved by the Australian Securities and Investments Commission (ASIC).

Summary

1.       This instrument provides relief from the Corporations Act 2001 (the Act) with respect to the requirement to hold an Australian financial services licence (AFS Licence), Australian market licence and or an Australian CS facility licence under Chapter 7 of the Act, for distributors (distributors) of a limited class of stablecoins (eligible stablecoins) and a limited class of wrapped tokens (eligible wrapped tokens).

Purpose of the instrument

1.       The Act provides that a person may only provide a financial service, operate a financial market or operate a clearing and settlement facility in this jurisdiction if the person has an AFS Licence, Australian market licence and or an Australian CS facility licence that authorises the person to provide those services or operate the facility or market in this jurisdiction or if an exemption applies to the person from relevant parts of the Act. 
2.       The purpose of this instrument is to exempt distributors from the requirement to hold:

1.    an AFS Licence to provide financial services,
2.    an Australian market licence to operate a financial market, and
3.    an Australian CS facility licence to operate a clearing and settlement facility,

in relation to eligible stablecoins and eligible wrapped tokens, by exempting them from the obligations in relevant parts of the Act, subject to the condition set out in the instrument. 

1.       To rely on the relief, distributors must comply with various requirements and conditions in relation to the exemptions, including one which requires them to make available to retail clients a Product Disclosure Statement for the eligible stablecoin where one has been prepared by an eligible stablecoin issuer and for the eligible wrapped token where one has been prepared by an eligible wrapped token issuer.
2.       In addition, the instrument provides targeted relief to:

1.    issuers of eligible stablecoins and eligible wrapped tokens from transaction reporting requirements (subsection 1017F(2)) where the issuer is not a party to the transaction, and
2.    distributors of eligible wrapped tokens from needing to prepare disclosure documents as a result of being taken to be the issuer of the eligible wrapped token because of s761E(5).

Consultation

1.       Consultation Paper 381: Updates to INFO 225: Digital assets: Financial products and services (CP 381) stated that some stablecoins may be a financial product, specifically a non-cash payment facility, and some wrapped tokens may be a financial product, specifically a derivative, under the current law. CP 381 sought feedback on whether any transitional provision or regulatory relief would facilitate the transition from regulation under the current law to the Government’s proposed reforms for stablecoins and wrapped tokens.
2.       Many submissions noted the compliance costs associated with holding an AFS licence, Australian market licence or CS facility licence for distributors of either stablecoins or wrapped tokens. Several respondents suggested that regulating stablecoins and wrapped tokens under the existing regime should be deferred until the Government’s proposed payment services and digital asset platform reforms (Government’s law reforms) commence. These reforms have been introduced to parliament as the Corporations Amendment (Digital Assets Framework) Bill 2025 (Cth).
3.       This instrument responds to concerns that:

1.    there would be a significant cost and compliance burden on distributors associated with applying for one or more licences in relation to eligible stablecoins or eligible wrapped tokens as well as the costs of ongoing compliance with the obligations of those licences; and
2.    the implications of the regulatory burden and associated costs on distributors to hold one or more licences in relation to eligible stablecoins or eligible wrapped tokens under the existing regime in light of the Government’s law reforms to regulate distributors of those stablecoins or wrapped tokens under the proposed digital asset platform, tokenised custody platform and payment services licencing regimes.

1.        ASIC undertook a public consultation on the proposed instrument in CS-032 Proposed relief for certain stablecoins and wrapped tokens, and extension of omnibus accounts for digital asset custody. ASIC took this feedback into consideration when finalising the instrument. This includes:

1.    expanding the definitions of eligible stablecoin issuer and eligible wrapped token issuer to include that on or before 30 June 2026, the issuer has lodged with ASIC an application for an appropriate AFS Licence that has not been rejected or refused by ASIC, or withdrawn by the applicant;
2.    adding that the distributor needs to be reasonably satisfied that the issuer of the digital assets is an eligible wrapped token issuer or an eligible stablecoin issuer. This provides a simpler threshold for distributors to understand and assess if the digital assets they wish to distribute are eligible stablecoins or eligible wrapped tokens;
3.    noting feedback that some issuers of wrapped tokens will be required to obtain an AFS Licence authorisation to issue derivatives, but when the Government’s law reforms are enacted they will be regulated differently as tokenised custody platforms. In response, we note that not all wrapped tokens are derivatives. Further, where an issuer of an eligible wrapped token requires a licence to issue derivatives, they can apply for a tailored licence authorisation for digital assets that are derivatives where there is no leverage or margining (see CP 381.42).

1.   ASIC has consulted with the Office of Impact Analysis (OIA) in relation to whether an Impact Analysis is required. OIA advised that the preparation of an Impact Analysis was not required as the proposal is likely to impact an immaterial proportion of Australian businesses.

Operation of the instrument

Part 1 – Preliminary

Name of legislative instrument

1.   Section 1 of the instrument provides that the name of the instrument is the ASIC Corporations (Stablecoin and Wrapped Token Relief) Instrument 2025/867.

Commencement

1.   Section 2 of the instrument provides that the instrument commences on the day after it is registered on the Federal Register of Legislation. 

Authority 

1.   Section 3 of the instrument provides that the instrument is made under subsections 791C(7), 820C(7), 926A(2) and 1020F(1) of the Act. 

Simplified outline

1.   Section 4 of the instrument provides a simplified outline for the instrument. Its purpose is to assist readers in understanding the substantive provisions. However, the outline is not intended to be comprehensive, and readers should rely on the substantive provisions when considering the instrument’s effect.

Definitions

1.   Subsection 5(1) of the instrument provides a definition of cash or cash equivalents, digital asset, distributor, eligible stablecoin, eligible stablecoin issuer, eligible wrapped token, eligible wrapped token issuer, exempt foreign issuer, non-cash payment facility, offer, overseas bank, retail client, stablecoin, underlying currency and underlying currency amount.
2.   The definition of eligible wrapped token is limited to arrangements where the digital asset that is a wrapped token is referencing other digital assets (see paragraph (b) of its definition).
3.   For the purposes of this instrument, the definition of cash and cash equivalents is broader than the legislative regime for client money. It includes investments such as, bank deposits and other short-term bank liabilities (including term deposits, certificates of deposit, short term bank bills), money market funds, cash management trusts, short term government securities and overnight repurchase agreements involving government securities.
4.   Subsection 5(2) of the instrument provides that the instrument applies to distributors where the distributor is reasonably satisfised that:

1.    the issuer of a stablecoin satisfies paragraphs (b) or (c) of the definition of eligible stablecoin issuer, or
2.    the issuer of a digital asset that is a derivative satisfies subparagraphs (b)(ii) or (iii) of the definition of an eligible wrapped token issuer.

Part 2 – Exemption

Australian market licence exemption

1.   Section 6 of the instrument provides that a distributor does not have to comply with subsection 791A(1) of the Act if it operates a financial market only because one or more eligible stablecoins or eligible wrapped token is a financial product.

Australian CS facility licence exemption

1.   Section 7 of the instrument provides that a distributor does not have to comply with subsection 820A(1) of the Act if it operates a CS facility only because one or more eligible stablecoins or eligible wrapped tokens is a financial product.

AFS Licence exemption

1.   Section 8 of the instrument provides that a distributor does not have to comply with subsection 911A(1) of the Act for the provision of any of the following financial services:

1.    providing general advice in relation to an eligible stablecoin or an eligible wrapped token;
2.    dealing in (other than by issuing) an eligible stablecoin or an eligible wrapped token;
3.    issuing an eligible wrapped token;
4.    making a market for an eligible stablecoin or an eligible wrapped token;
5.    providing a custodial or depository service in relation to an eligible stablecoin or an eligible wrapped token.

Sales amounting to indirect issue exemption

1.   Section 9 of the instrument provides that if a distributor is reasonably satisfied that the issuer of an eligible stablecoin or an eligible wrapped token is an exempt foreign issuer, the distributor does not have to comply with subsections 1012C(3) and (4) of the Act for an offer relating to the sale of the stablecoin or token to the extent those subsections require a Product Disclosure Statement to be given because the offer would take place in the circumstances covered by subsection 1012C(6) of the Act

Transaction confirmation exemption

1.   Section 10 of the instrument provides that an eligible stablecoin issuer or eligible wrapped token issuer does not have to comply with subsection 1017F(2) of the Act for a transaction in relation to an eligible stablecoin or eligible wrapped token it has issued if it is not a party to the transaction.

Disclosure exemption for distributors of eligible wrapped tokens

1.   Section 11 of the instrument provides that a distributor of an eligible wrapped token does not have to comply with Part 7.9 of the Act in relation to the issue of the eligible wrapped token, notwithstanding that the distributor is taken to issue the token as a result of being party to the arrangement (subsection 761E(5) of the Act).

Periodic reporting requirement

1.   Subsection 12(1) of the instrument provides that the exemptions in sections 6 to 10 only apply in relation to an eligible stablecoin in that class if the eligible stablecoin issuer has published on its website certain disclosures about the composition and value of reserves in relation to the eligible stablecoin within certain time periods. Those are:

1.    a report about the composition and value of the reserves in relation to the eligible stablecoins as at a date that is no more than one month before the date the report was published. This report must have been published within the last 4 months, for stablecoins that have been on issue for at least 4 months; and
2.    an audited report about the composition and value of the reserves in relation to eligible stablecoins in that class as at a date that is no more than three months before the date the report is published. This report must have been published within the last 13 months, for stablecoins that have been on issue for at least 16 months.  

1.   The reports must identify that the reserves comprise only cash or cash equivalent assets denominated in the underlying currency, and that the value of the reserves is equal to or greater than the total underlying currency amount of eligible stablecoins in the class on issue.

Holding of reserve assets on trust

1.   Subsection 12(2) of the instrument provides that a distributor may only rely on an exemption in sections 6 to 9 in relation to an eligible stablecoin if the terms and conditions of, or Product Disclosure Statement for, the eligible stablecoin contain provisions to the effect that the eligible stablecoin issuer or a custodian must hold the reserves in relation to the eligible stablecoin on trust for the holders of eligible stablecoins in that class.
2.   However, subsection 12(3) provides that subsection 12(2) does not apply in relation to assets forming part of the reserves held outside of Australia under certain circumstances.
3.   Subsections 12(2) and 12(3) mirror the requirements for custodial or depository service providers under ASIC Corporations (Custody Standards for Providers of Custodial and Depository Services) Instrument 2024/17.

Condition

1.   Section 13 of the instrument provides that a distributor that relies on an exemption in sections 6 to 8 in relation to a retail client must take reasonable steps to give or make available to the retail client a Product Disclosure Statement for the eligible stablecoin or eligible wrapped token that is the most current in use, where one has been prepared by the eligible stablecoin issuer or the eligible wrapped token issuer.

Part 3 – Repeal

1.   Section 14 of the instrument provides that the instrument is repealed at the start of 1 January 2029.

Legislative instrument and primary legislation

1.   The subject matter and policy implemented by this instrument is more appropriate for a legislative instrument rather than primary legislation because: 

1.    the matters contained in the instrument only affect a limited class of entities, namely the distributors of eligible stablecoins or wrapped tokens, and the issuers whose eligible stablecoins or wrapped tokens are able to be dealt with by the distributors;
2.    the instrument provides administrative relief in circumstances where strict compliance with the primary legislation produces a significant regulatory burden; and
3.    the instrument is intended to be temporary until the proposed Government’s law reforms are enacted.  

1.   On this basis, it is appropriate for the delegate of ASIC to provide exemptive relief, as the matters contained in this particular instrument are of a highly specific and temporary nature which are more appropriate for a legislative instrument rather than primary legislation. 

Duration of the instrument

1.   The instrument expires after 3 years, it will cease to apply on 1 January 2029, by section 14 of the instrument.
2.   ASIC considers that the duration of the instrument is appropriate as the instrument is intended to bridge the gap by allowing for sufficient time for the Government’s law reforms to be implemented. It is ASIC’s usual practice to review instruments at the time of the expiration or if circumstances change such that the expiration is no longer appropriate.

Legislative authority

1.   The delegate of ASIC makes this instrument under subsections 791C(7), 820C(7), 926A(2) and 1020F(1) of the Act.  
2.   This legislative instrument is a disallowable under section 42 of the Legislation Act 2003. 

Statement of Compatibility with Human Rights 

1.   The Explanatory Statement for a disallowable legislative instrument must contain a Statement of Compatibility with Human Rights under subsection 9(1) of the Human Rights (Parliamentary Scrutiny) Act 2011. A Statement of Compatibility with Human Rights is in the Attachment.

Attachment

Statement of Compatibility with Human Rights

This Statement of Compatibility with Human Rights is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.  

ASIC Corporations (Stablecoin and Wrapped Token) Instrument 2025/867

Overview

1.       The instrument provides relief from the Corporations Act 2001 with respect to the requirement to hold an Australian financial services licence, Australian market licence and or an Australian CS facility licence under Chapter 7 of the Act, for distributors of a limited class of stablecoins and a limited class of wrapped tokens.

Assessment of human rights implications

1.       This instrument does not engage any of the applicable rights or freedoms.

Conclusion

1.       This instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.