Australia targets AU$24B efficiency boost as central bank fast‑tracks market tokenization
Australia’s central bank is moving decisively toward a tokenized financial system, estimating the shift could unlock around AU$24 billion in efficiency gains every year. The Reserve Bank of Australia (RBA) now frames tokenization not as a speculative concept, but as an inevitable evolution of wholesale finance – with the core question shifting from “if” to “how” it will be implemented.
Presenting the latest findings from Project Acacia, RBA Assistant Governor Brad Jones outlined how tokenized assets and tokenized forms of money are edging toward real‑world deployment in wholesale markets. The project’s outcomes are now feeding into a concrete roadmap that prioritizes implementation, industry coordination, and structured market testing.
The AU$24 billion estimate comes from research by the Digital Finance Cooperative Research Centre (DFCRC), which analyzed potential productivity gains from moving traditional financial instruments onto tokenized rails. According to Jones, these benefits represent only a baseline. If tokenization paves the way for entirely new products, services, and markets, the upside could be considerably larger.
Project Acacia explored 20 practical use cases involving tokenized versions of familiar financial instruments. Among them were government bonds, corporate bonds, repurchase agreements (repos), and investment funds. The goal was not just to digitize existing assets, but to see how programmable, interoperable tokens might streamline issuance, trading, settlement, and collateral management.
A key element of the project was testing settlement across four distinct forms of money: a wholesale central bank digital currency (CBDC), balances held in exchange settlement (ES) accounts, privately issued stablecoins, and bank deposit tokens. By running these different settlement options through the same use cases, the RBA was able to clarify where each type of tokenized money best fits.
The findings suggest that no single form of tokenized money will dominate all markets. Instead, each appears suited to specific niches. Stablecoins, for instance, may be better positioned to serve smaller or emerging tokenized markets where participants are willing to adopt more experimental instruments. In contrast, bank deposit tokens – which represent tokenized claims on commercial bank deposits – look more suitable for large‑scale markets, where participants demand robust prudential oversight and dependable access to central bank liquidity.
Jones emphasized that stablecoins and bank deposit tokens should not be seen as direct rivals. Rather, they can operate side by side, filling different roles along the wholesale finance spectrum. This “portfolio” approach to payment instruments aligns with the RBA’s broader view: tokenized markets will likely rely on a mix of settlement options, each optimized for particular risk tolerances, regulatory frameworks, and market sizes.
Another important conclusion from Project Acacia is that a wholesale CBDC is not a strict prerequisite for tokenized markets to flourish. Market participants described a wholesale CBDC as “potentially helpful, but far from essential.” Jones pointed to the US, where tokenized repo markets already handle close to 400 billion US dollars in daily transactions – all without relying on a dedicated wholesale CBDC. This example reinforces the idea that regulatory clarity, robust infrastructure, and industry collaboration may matter more than the specific form of central bank money.
To turn these insights into tangible progress, the RBA is launching a series of initiatives alongside the Council of Financial Regulators, the DFCRC, and private‑sector participants. At the heart of this next phase is a digital financial market infrastructure sandbox. This controlled testing environment will allow institutions to experiment with tokenized assets, tokenized money, and new settlement mechanisms under stage‑gated, supervised conditions. The sandbox is designed to surface legal, technical, and operational issues early, without exposing the wider financial system to undue risk.
In parallel, the central bank plans to revisit the rules governing access to exchange settlement accounts once upcoming reforms to payment service provider licensing pass through parliament. Broadening or recalibrating ES account access could be a critical enabler for new tokenized payment models, especially for non‑bank entities that want to integrate more directly with the core of Australia’s payment and settlement infrastructure.
Regulators and industry players will also create a joint tokenization advisory group. This body will support coordination across banks, fintechs, asset managers, and infrastructure providers, helping to align standards, share technical insights, and flag regulatory gaps. Alongside this, an expanded Deposit Token Working Group will concentrate on ensuring interoperability between deposit tokens issued by different banks, aiming to avoid fragmentation and siloed ecosystems.
Beyond the immediate AU$24 billion efficiency estimate, tokenization could reshape how Australian markets operate at a structural level. Smart contracts and programmable settlement could cut back‑office costs, reduce the need for reconciliation, and shrink settlement risk. For example, tokenized bonds could be issued, traded, and settled on a single platform, with interest payments and corporate actions executed automatically via code instead of complex manual processes.
For institutional investors, tokenization promises faster settlement cycles, more precise collateral management, and near real‑time visibility into positions and risk. Repo markets, in particular, could benefit from tokenized collateral that moves instantly between counterparties, lowering operational friction and reducing the reliance on intermediaries. These shifts may free up capital and improve liquidity, supporting deeper and more resilient markets.
Tokenization could also improve market access over the longer term. While the current focus is on wholesale use cases, the same technology stack could eventually enable fractional ownership of traditionally illiquid assets – such as infrastructure projects, private credit portfolios, or commercial real estate – making them easier to trade and diversify. Australia’s move to establish a regulatory and experimental framework early may position it as a regional hub for such innovations.
However, the path forward is not purely technical. Governance, legal certainty, and risk management will determine how quickly tokenization scales. Questions around finality of tokenized transactions, treatment of tokenized assets in insolvency, cybersecurity obligations, and data privacy must be addressed. The sandbox, advisory group, and working groups are, in effect, tools to surface and solve these issues in partnership with industry rather than in isolation.
Banks and other incumbents will also need to adapt their business models. Deposit tokens, for instance, could change how customers perceive and use bank deposits if they become widely accepted across tokenized platforms. Institutions that move early may gain a competitive edge in custody, token issuance, on‑chain settlement, and digital asset services. Those that delay could find new entrants capturing key parts of the value chain.
From a policy perspective, the RBA’s stance signals a pragmatic middle ground. It is not pushing a single “official” token solution, nor is it leaving the field entirely to private issuers. Instead, it is cultivating a hybrid ecosystem where central bank money, regulated bank liabilities, and well‑supervised private tokens can co‑exist. This approach aims to preserve monetary and financial stability while still encouraging experimentation and competition.
The broader macroeconomic context also matters. As more jurisdictions test or deploy tokenized settlements, cross‑border interoperability will become critical. Australia’s early work on standards, interoperability of deposit tokens, and integration with core payment rails could make it easier to plug into global tokenized markets in the future. This would be especially relevant for cross‑border securities, derivatives, and foreign exchange transactions, where legacy processes are still slow and expensive.
In the near term, market participants in Australia can expect more consultation papers, pilot programs, and targeted tests emerging from the sandbox environment. Asset managers may be invited to tokenize specific portfolios or funds, banks to issue and test deposit tokens under defined conditions, and infrastructure providers to demonstrate interoperability between different platforms and forms of tokenized money.
Ultimately, the AU$24 billion figure serves as both a headline and a benchmark. It quantifies the scale of potential gains but does not capture the full strategic importance of the shift. For Australia, moving early on tokenization is as much about safeguarding competitiveness and innovation in its financial sector as it is about cutting costs. The RBA’s message is clear: tokenized markets are no longer a distant possibility, but a near‑term transition that needs to be planned, tested, and executed deliberately.