Key takeaways
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Australia could generate A$24 billion, or about $17 billion, annually from digital assets and tokenized finance. But that opportunity depends on whether policymakers establish clear and supportive regulatory frameworks.
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Tokenization could transform financial markets by improving liquidity, automating settlement processes and expanding investor access to assets such as foreign exchange, equities, government debt and investment funds.
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Tokenized money, including CBDCs and stablecoins, could significantly reduce the cost and time of cross-border payments by minimizing reliance on traditional banking networks.
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Regulatory uncertainty remains the biggest barrier to growth, as financial institutions hesitate to commit capital without clear rules on licensing, custody standards and compliance for digital asset businesses.
Australia is widely regarded as one of the most technologically advanced financial markets in the Asia-Pacific region. However, in the area of digital assets and tokenized finance, the country faces a critical choice.
The Digital Finance Cooperative Research Centre (DFCRC) and the Digital Economy Council of Australia published a report titled “Unlocking Australia’s $24b Digital Finance Opportunity.” It warns that the country will capture only a small portion of these gains unless its regulatory framework is updated swiftly.
The report emphasizes that tokenized markets and digital finance could deliver around A$24 billion (approximately US$17 billion) in annual economic benefits for Australia, provided lawmakers move forward with regulation.
The scale of Australia’s digital finance opportunity
The DFCRC analysis indicates that tokenization and digital asset infrastructure could significantly improve several parts of Australia’s financial system. These improvements are expected to create economic value by making markets more efficient, increasing liquidity and allowing more investors to participate.
The report highlights three main sources of value that together represent an estimated A$24 billion opportunity.
Improved financial markets
Tokenized financial markets are likely to deliver significant economic benefits. By recording traditional securities such as shares or bonds on blockchain-based systems, markets can automate settlement processes, lower operational costs and open participation to a wider range of investors.
Tokenized infrastructure can also bring greater transparency and efficiency to assets including:
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foreign exchange
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investment funds
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public equities
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government debt
Improved liquidity and easier access for investors can lead to higher trading volumes and less friction throughout the financial system.
Improved payments
Tokenized forms of money such as stablecoins, bank deposit tokens and central bank digital currencies (CBDCs) could make both domestic and international payments faster and cheaper.
At present, many cross-border payments depend on correspondent banking networks, which are often slow and costly. Tokenized payment systems could enable near-instant transfers between institutions, shortening settlement times and reducing fees.
Better use of digital assets
Tokenization allows financial assets to become more programmable and easier to use in digital financial services. Smart contracts can automatically manage tasks such as margin calls, collateral handling and settlement, which are currently manual and time-intensive processes.
According to the DFCRC report, almost half of the gains related to assets could come from enabling new activities on tokenized infrastructure, including collateralized lending, repo markets and invoice financing.
Did you know? Australia was among the earliest countries to explore blockchain for financial market infrastructure. In 2017, the Australian Securities Exchange (ASX) began a project to replace its decades-old clearing system with blockchain technology before later reconsidering the plan.
Why regulation is the primary obstacle
While digital asset markets show great promise, the DFCRC report identifies regulatory uncertainty as the main factor holding back growth in Australia.
Large financial institutions generally avoid investing significant capital in new technologies until clear legal frameworks are established. Without specific rules on licensing, asset custody and compliance, many firms are hesitant to launch major tokenized products.
Key structural challenges include:
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Vague licensing: It is currently unclear how digital asset businesses should obtain official permits.
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Poor collaboration: There is a lack of communication between regulatory bodies and the industry.
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Limited trials: A shortage of large-scale pilot programs limits practical testing.
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Legal ambiguity: The status of tokenized financial products remains undefined.
These issues hinder progress even when the necessary technology is already available. Institutional investors need a well-defined regulatory foundation to enter the market with confidence.
The high cost of regulatory…
cointelegraph.com