Australian stablecoins show promise as a16z-backed Archblock eyes market

This is Part 1 of a feature on Australian dollar stablecoins. See part 2 here.

The crypto landscape is chilly Down Under with the Australian Securities and Investments Commission (ASIC) promising tougher scrutiny on the sector. Since October last year, the financial regulator has made enforcement actions on at least four crypto companies.

It slapped crypto investment firm Holon Investments with a stop order, prohibiting it from offering or distributing its three crypto funds to retail investors; the firm later wound up those funds.

The regulator then sued BPS Financial, the owner of Block Trade Exchange, for misrepresenting the liquidity of Qoin tokens; the trial is scheduled to commence on October 16.

Later in November, post-FTX, ASIC sued fintech startup Block Earner for its yield program, alleging that it was an unregistered managed investment scheme. Digital currency exchange Finder Wallet was also sued for a similar program, Finder Earn, and has since scrapped the scheme.

Photo credit: mvaligursky / 123RF

While Australia may not be the most crypto-friendly country at the moment, stablecoins appear to be an exception. US-based issuer TrueCoin has decided to finally put boots on the ground for its Australian dollar stablecoin offering, TrueAUD (TAUD).

Why AUD and why now?

“The emergence of non-USD stablecoins is happening, whether you like it or not,” says Charlie Chen, the Sydney-based managing director in Australia for TrueCoin who, at the time of our interview, was six days into the job. Prior to TrueCoin, he was the chief commercial officer at Australian blockchain startup Ettle, the issuer of AUDE, another AUD stablecoin.

“USD stablecoins have gotten so much attention, not just in Australia but globally.” adds Chen. “But that doesn’t mean that the other currencies have done nothing. They’re still brewing.”

Besides TAUD, TrueCoin issues three other stablecoins pegged to the Canadian dollar, British pound, and Hong Kong dollar.

TrueCoin’s first stablecoin, TrueUSD (TUSD), launched in 2018 and was sold to Asian conglomerate Techteryx in 2020. TUSD is currently the world’s sixth largest stablecoin by market capitalization.

Photo credit: photo_gonzo / Shutterstock

While TrueCoin doesn’t own the TUSD business any longer, the firm’s holding company, Archblock, continues to manage the coin as part of a service agreement with Techteryx, which took over TUSD’s engineering and marketing efforts.

Localizing the TAUD

Regulatory chill

Regulatory outlook