Australia is building a stablecoin system that excludes consumers

Some good news first: Australian banks are moving to trial stablecoins and tokenised assets. 

Wholesale stablecoin pilots like Project Acacia are a welcome development. Lower cost and faster payments are cause for celebration. The issue is what comes next and whether Australia is bold enough to  articulate a clear, proportionate pathway for stablecoins to move from closed, institutional trials to consumer-facing payments that deliver public benefit.

What Stablecoins are good for

Stablecoins are designed to move value quickly, reliably and cheaply. Their most compelling use cases are in cross-border payments, remittances and peer-to-peer transactions. This is where fees, friction and delays remain real problems. For places like Fiji, Tonga and other Pacific Islands, remittances are a key source of national income but transaction costs can often exceed 10%. It doesn't have to be this way - at a fraction of the cost with flat network fees, stablecoins can put more money in the pocket of consumers. 

Yet in Australia, stablecoins are being embraced primarily as a wholesale efficiency tool. Banks and institutional partners are experimenting with tokenised settlement to tinker with existing systems  while consumers miss out, constrained by access, policy uncertainty and a lack of national vision.

The Parliamentary Inquiry into the Payments Sector is currently examining the impacts of monopolistic power among card scheme operators. Evidence before the committee has highlighted that credit card transaction fees alone are estimated to generate close to $1.2 billion annually in revenue. The word "revenue" is of course a zero sum game - it is ultimately a transfer of wealth from the pockets of merchants and consumers to the service providers.

A system shaped by incentives

This outcome is predictable given the incentives at play.

Even those enterprising individuals and small businesses that actively seek to use financial innovations will quickly find access constrained by Australia's major banks. Parliamentary inquiries, industry submissions, and more individual user compliant posts than you can shake a stick at, have all raised concerns that compliant businesses continue to face account closures, transfer limits and opaque risk decisions.

A cynical view would be that this is anti-competitive behaviour. For the traditional institutions, enabling a superior technology which erodes your revenue base would be like turkeys voting for Christmas. A more generous interpretation would be that the recently uncertain regulatory status of the digital assets industry has stymied adoption by these inherently risk averse institutions.. 

It seems that the class exemption issued by ASIC on the distribution of stablecoins has made little difference and the outcome is that every day Australian consumers and businesses continue to miss out.

The case for an Australian Genius Act 

This impasse poses a strong philosophical question - is Australia's ambition limited to marginal improvements to legacy systems or do we usher in a paradigm shift by building financial infrastructure that is appropriate for the 21st century? 

Supporters of the status quo argue that retail stablecoin use cases will follow once regulatory frameworks mature and risks are better understood. There is merit in sequencing.But this sequencing stalls when there is no visible pathway from wholesale pilots to consumer access. Particularly when it appears the  old guard is doing all it can to slow down retail adoption in every other context.

As we sit on the sidelines, the rest of the world is embracing new technologies. Total stablecoin transaction volume grew 72% last year, reaching an all-time high of $33 trillion. Major economies like the US and the UK have started rolling out regulatory regimes to encourage safe innovation. In Australia, by contrast, stablecoins are proving their value behind closed doors while everyday payment costs and delays persist.

The risk for Australia is not that stablecoins fail, it is that they succeed only to preserve the status quo. The solution is clear: introducing rules that unlock both wholesale experimentation and proportionate, consumer-facing use cases, rather than leaving access to discretion and inertia. This is precisely what the GENIUS Act seeks to do in the US, and Project Acacia is the best local example available as to why legislators must move quickly and show ambition to ensure benefits are shared throughout the economy.