Australia's Stablecoin Surge - When Tradfi meets Defi
Edited by Hugh Fraser
The GENIUS Act's passage in the US is poised to spark significant global growth and adoption of stablecoins (digital assets pegged to fiat currencies), enabling frictionless transactions, secure stores of value, and programmable money on blockchain networks. It is estimated that by 2030 the value of stablecoins in circulation globally will grow to more than US $3 trillion (currently $250 billion), systemically changing global capital flows and transactions. A recent JellyC article sets out how we expect widespread stablecoin adoption to radically disrupt global forex markets, help the US debt market and buttress the US dollar’s position as the global reserve currency.
M2 Supply vs Stablecoin Supply-2020-2030
At JellyC we expect stablecoins to unleash and underpin many benefits of blockchain technology, including reducing the frictional cost of administering funds and investments, making tokenising funds and investments possible, and driving further democratisation and availability of asset classes and investments.
The good news in Australia is two-fold – innovative Australian companies like Catena Digital are bringing Australia dollar backed stablecoins to the market, and the Federal Government is moving to introduce legislation to provide a framework to deliver the benefits and innovations of stablecoins in Australia and beyond.
The Australian Treasury released a statement in March 2025 titled "Developing an Innovative Australian Digital Asset Industry," outlining its approach to stablecoin regulation. The approach mirrors international best practices while adapting to Australia's regulatory environment. Like the US’s GENIUS Act, the proposed Australian system will require for stablecoins full backing by cash or cash-equivalent reserves, and quarterly reporting to regulators on reserve composition.
The recently returned Labor Government is engaged on producing a legislation package for the development, operation and regulation of Australia’s digital economy. The Australian Parliament’s spring sitting of 2025 is expected to see the release of draft legislation for public consultation, followed by parliamentary consideration and passage some time in 2026. So operational regulation for stablecoins in Australia could emerge as early as late 2026, subject to the outcome of the parliamentary process.
Catena Digital: Pioneering Australian Dollar Stablecoin Innovation with AUDM
At the forefront of Australian stablecoin innovation and development is Catena Digital, an Australian company developing and soon-to-launch the AUDM, an Australian dollar-backed stablecoin which is designed to provide stability, regulatory compliance, and most importantly, efficient operations.
In July this year Catena Digital was granted an Australian Financial Services Licence (AFSL) with an authorisation to issue non-cash payment facilities - believed to be the first time ASIC has granted an AFSL for the express purpose of issuing stablecoins - further enabling Catena Digital to emerge as a significant player in the development of Australia's digital asset ecosystem.
Catena Digital's approach emphasises strong institutional partnerships and regulatory compliance. The company is currently working with market makers to provide liquidity and aims to list AUDM on both domestic and global exchanges, mimicking the successful models of the US dollar backed stablecoins established by Circle and Tether.
Catena Digital's focus extends beyond simple stablecoin issuance to facilitating projects that require regulated stablecoins to enhance digital finance in Australia. They envision tokenisation as the foundation of a new digital economy, where stablecoins and digital assets fundamentally transform financial transactions and asset ownership. Catena Digital sees stablecoins as enabling programmable money, where conditional logic can be embedded in payments, opening vast applications and drastically reducing transaction costs across the financial system.
Tokenising assets such as funds, bonds, houses, and cars will eliminate legacy settlement and clearing processes, greatly enhance liquidity, and allow real-time, frictionless ownership transfers. These innovations could reduce transaction costs by 80-90%, provide always-live asset valuation, and make cumbersome processes like conveyancing and land title searches obsolete.
Australia’s Project Acacia: Testing the Future of Finance
Project Acacia is a research initiative led by the Reserve Bank of Australia and the Digital Finance Cooperative Research Centre, being conducted with a broad range of industry participants from both digital asset innovators such as Catena Digital, Fireblocks and NotCentralised, and established financial institutions including CBA, Westpac and Northern Trust. It is one of the most extensive research programs undertaken in Australia and indeed globally that explores and trials how digital money and tokenised assets could operate in wholesale financial markets.
Project Acacia involves the development and execution of 24 innovative use cases across diverse asset classes which include fixed income, private markets, trade receivables, and carbon credits. Nineteen of these use cases involve real money and real asset transactions, while five are proof-of-concept trials using simulated transactions. The project tests various settlement assets, including stablecoins, bank deposit tokens, and pilot wholesale central bank digital currency (CBDC).
The potential benefits of the use cases and projects being explored and tested in Project Acacia are significant and genuinely groundbreaking. For instance tokenisation could eliminate legacy post-trade processing, reduce settlement timelines (replacing the traditional T+2 for stocks, bonds and FX trades).
Project Acacia represents the prospect and beginnings of a transformative leap forward for Australia's financial system, while also paving the way for broader adoption of digital asset infrastructure.
Catena Digital’s Tokenisation Use Case
Catena Digital’s participation in Project Acacia demonstrates its commitment to advancing Australia's digital financial infrastructure. The company is participating in use cases focused on providing stablecoins for delivery versus payment (DvP) for tokenised financial markets, working in collaboration with Imperium Markets, an ASIC Licenced wholesale market operator who have built a marketplace for the transition of bank deposits, money markets and bonds markets from analogue to digital. This pilot explores how tokenised assets can be settled with commercially issued payment tokens, bringing greater speed, reliability, and efficiency to Australia's wholesale finance sector.
DvP is a fundamental mechanism in wholesale markets, ensuring that securities only transfer once payment is received and settlement risk is eliminated. Today, this is managed through infrastructure such as Austraclear for bonds, or through legacy payment and settlement mechanisms for other wholesale instruments. These processes are often manual, operationally intensive, and in some cases offer no secondary liquidity. The pilot will explore how tokenised assets can instead be settled in real time with a commercially issued Australian dollar stablecoin, aiming to deliver greater speed, reliability, and efficiency to Australia’s wholesale finance sector.
While the current pilot centres on tokenised annuities, the model has clear applications across a broader range of products, from bonds through to other assets classes. By embedding stablecoin-based DvP directly into transactions, Catena and Imperium are looking to demonstrate how Australia’s markets could transition towards faster settlement, reduced counterparty risk, and significantly lower operational costs.
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