Australia’s central bank is stepping up efforts to lay the legal and market groundwork for tokenized assets, as regulators begin aligning on rules that could enable these digital instruments to be traded at scale within the mainstream financial system.
In a recent speech, Reserve Bank of Australia Assistant Governor Brad Jones said the conversation has clearly changed. According to him, the question is no longer whether tokenization will become part of Australia’s financial system, but how it will be introduced safely and effectively.
His remarks came after the central bank wrapped up Project Acacia, a research program that studied how tokenized assets and digital forms of money could work in real financial markets.
RBA sounds positive alarm for tokenised assets
The central bank has confirmed it is working with other regulators to build clear, practical rules for tokenized markets. This includes deciding how digital assets should be legally defined, how transactions can be considered final and secure, and how new platforms will be approved and supervised. In short, authorities want to make sure the system is trustworthy before it expands.
At the same time, lawmakers are moving to bring crypto platforms and token custody services fully under Australia’s financial rules.
This implies that companies who hold customers’ digital tokens must be appropriately licensed and must adhere to rigorous requirements to safeguard those digital assets, similar to how conventional financial institutions do currently.
How can tokenization help?
In essence, tokenization is all about turning ownership of physical assets into digital tokens that can be easily and more efficiently traded. Rather than waiting for days for transactions to be settled, which is often the case in traditional markets, tokenization could enable near-instant transactions, better management of ownership, and reduced costs. That is why banks, asset managers, and regulators across the globe are keeping a keen eye on this technology.
But technology alone is not enough. Financial markets depend on clear laws, trusted systems, and strict oversight.
Before tokenized assets can be widely used, regulators need to establish rules around things like investor protection, settlement processes, and how digital assets are stored and transferred. Without the legal and operational clarity, large financial institutions would be hesitant to adopt the new system, fearing that it might result in a battle with regulators in the future.
To address this, the central bank plans to work closely with other regulators and industry players to launch a new digital market infrastructure sandbox.
Think of this as a real-world testing ground where companies can try out tokenized assets and settlement systems while following the rules.
What makes this initiative different from earlier experiments is its long-term focus. Instead of short pilots that end after a few months, the new sandbox is designed to support ongoing testing that could eventually lead to full commercial use.
This marks an important turning point. It signals that regulators are beginning to treat tokenization not as a distant innovation, but as a technology that could soon become part of everyday financial operations.
If the framework develops as planned, tokenized assets could eventually be traded within the same regulated system that handles traditional securities today, just faster and more efficiently.
RBA sees tokenisation driving A$24 billion annual economic boost
According to the RBA, tokenisation might increase productivity and lower risk in wholesale markets, especially if tokenised funds and assets can be settled on synchronised systems. The annual economic benefit to Australia in such a case is expected to be over A$24 billion (US$16.6 billion).
Additionally, the bank stated that future research will concentrate on stablecoins, tokenised bank deposits, settlement infrastructure, and the possible function of a wholesale central bank digital currency.