Stablecoin Crossroads: Industry Urges Bold Action to Secure the Australian Dollar’s Digital Future

Australia’s stablecoin policy is being shaped now, with industry groups warning that decisions over the next 12 months could determine whether the Australian dollar is meaningfully used in future tokenised payments markets.

The push came through submissions to the House Standing Committee on Economics Inquiry into Schemes, Digital Wallets and Innovation in the Payments Sector, following a 25 February industry roundtable. 

Participants included the Digital Economy Council of Australia (DECA), Digital Asset Working Group, Australian Bitcoin Industry Body, Bitcoin Policy Australia, Coinbase Australia and Kraken.

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Submitters argued that overseas markets are moving quickly on blockchain-based settlement and payments, and that Australia risks falling behind without clear rules and modernised infrastructure.

Coinbase Warns AUD Has ‘Little To No Representation’

Coinbase Australia urged the government to champion AUD stablecoins and said the AUD has “little to no representation” on-chain. 

Stablecoins have become a significant part of the global payments landscape, though unfortunately the Australian dollar has little to no representation in this new medium. To ensure the Australian dollar maintains its global importance we need a legal framework that creates trust, and the incentivisation to use and hold AUD stablecoins by paying interest on them,” Coinbase Australia said in a submission to the inquiry.

Coinbase Australia

The firm said paying interest could encourage demand for AUD stablecoins and help them compete with USD stablecoins. It also argued that higher usage could increase demand for Australian government bonds and reduce government borrowing costs, depending on adoption and design.

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The exchange raised a competitive concern, particularly that banks worldwide are exploring tokenised deposits that would likely pay interest, and also preventing stablecoin issuers from paying interest while allowing banks to do so would “pick winners” and entrench the big banks (one could argue this also relates to concerns that Standard Chartered raised about stablecoins potentially draining over $500 billion from bank deposits by 2028).

For its part, DECA called for clearer definitions around digital asset wallets, arguing that developers providing technical infrastructure that cannot move customer funds should not be regulated as custodians. It also listed stablecoin utility, debanking and network access as priorities.

Meanwhile, the Australian Bitcoin Industry Body argued that low-cost digital payment systems already operate internationally and could be adopted locally with modest regulatory changes. 

“This submission proceeds from a simple but often overlooked premise: a digital payment system that materially lowers transaction costs for high-volume, low-value transactions already exists, is operating at scale internationally, and can be adopted in Australia with only modest regulatory adjustment.”

For this reason, 2026 represents an appropriate moment for policymakers to review developments in digital payments through an international lens, as a growing number of private and public sector actors have begun integrating alternative payment rails alongside existing card-based system”.

Australian Bitcoin Industry Body

FinTech Australia similarly warned that slow policy could forfeit economic gains tied to payments, settlement and asset tokenisation.