Crypto leaders warn Australian government: Act or fall behind

The stablecoin opportunity in Australia is immense and the strategic policy decisions the government makes over the next 12 months could “define the future importance of the Australian dollar in global markets”, a panel have warned.

Several industry leaders made submissions to the House Standing Committee on Economics Inquiry into Schemes, Digital Wallets and Innovation in the Payments Sector on 25 February.

With international markets moving swiftly toward tokenised payments, key players warn Australia risks falling behind – or could seize the opportunity to lead in a new era of faster, cheaper and more accessible transactions.

To “give Australia a fighting chance” in the rapidly-evolving world of digital payments and capital markets, industry leaders are urging the government to take bold steps in 2026.

Participants in the blockchain and cryptocurrency roundtable included DECA, Digital Asset Working Group, Australian Bitcoin Industry Body and Bitcoin Policy Australia, Australian Bitcoin Industry, Coinbase Australia and Kraken.

Collectively, they say Australia faces a pivotal moment in digital finance and have urged regulators to embrace blockchain-based payments, support interest-bearing stablecoins and modernise financial infrastructure. As part of its submission to the hearing, Coinbase Australia described blockchain technology as the backbone of a new financial architecture.

Coinbase Australia urged the government to “champion the use of Australian stablecoins” and recommended the Committee direct Treasury to consider allowing interest on ‘Tokenised stored value facilities’ (tokenised SVFs, also referred to as stablecoins) as part of its upcoming financial system strategy review, and to operationalise the RBA’s wholesale CBDC, explored under Project Acacia, as a key backing asset for Australian stablecoins.

“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.

The exchange says providing interest on stablecoins would encourage demand and, combined with the low volatility of the Australian dollar and its status as the seventh most traded currency in the world, paired with a pass-through of interest, could tap demand for a US dollar on-chain alternative – allowing Australia to cement, or even surpass, its position as the seventh most traded currency in the world.

“This would in turn boost demand for Australian dollar Government bonds, pushing down Government borrowing costs, helping to repair Australia’s deficit.”

Australian banks are exploring the introduction of “tokenised deposits” – traditional bank deposits recorded on a blockchain that would likely continue to pay interest. Coinbase Australia argues that if banks are permitted to issue an interest-bearing blockchain-based dollar while stablecoin providers are prohibited from offering interest on their holdings, regulation would be unfair.

“If banks are able to issue an interest-bearing blockchain dollar, but stablecoins are unable to do so, the regulation is effectively picking winners, entrenching the dominance of the Big Four banks by legislating a product advantage that competitors cannot match. For these reasons, allowing interest to be paid on stablecoin holdings is a key strategic move that should be prioritised by the Australian Government.”

John O’Loghlen, managing director of APAC and country head of Australia for Coinbase, said the strategic opportunity lies in ensuring the Australian dollar is meaningfully represented as global capital markets and trade increasingly migrate to blockchain infrastructure.

“If we continue without a deliberate strategy, there’s a risk the Australian dollar is underrepresented in global payments. And if you look at FX, about 60 per cent is USD, and then a variety of pairs and trades and foreign currencies that match the strength and volume of those currencies typically. We think that should be mirrored in a stablecoin environment.”

Speaking at the roundtable, the Digital Economy Council of Australia (DECA) said the architecture of money is changing.

“Upgrading our financial rails is essential to lower costs for everyday Australians, and we have three critical priorities to achieve this,” head of operations Alec O’Sullivan said.

“First, we must correctly define digital asset wallets, developers providing pure technical infrastructure who cannot unilaterally move user funds must not be regulated as financial custodians. Second, we must protect the economic utility of stablecoins … Third, we must address the ongoing challenge of debanking and network access.”

In its formal submission, the Australian Bitcoin Industry Body highlighted the benefits of Bitcoin being used as a medium of exchange and a cash-like digital alternative, rather than solely as a store of value.

“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,” the Australian Bitcoin Industry Body said.

“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 systems.”

In a separate roundtable earlier in the day, FinTech Australia underscored the importance of government action in this space: “We are currently at a pivotal time for the adoption of digital assets,” the peak industry body said.

“There is a global opportunity and if Australia moves too slowly to grasp it, significant economic benefits will be foregone. Whether as new forms of property or as infrastructure for payment, settlement and asset tokenisation, the intersection with traditional financial systems is increasingly important.”