For years, Australia has been a cautious follower in the tokenisation race, watching on as Singapore, Hong Kong and the US experimented with central bank digital currencies (CBDCs), tokenised bonds and digital securities.
But Project Acacia, a joint effort involving the Reserve Bank of Australia, Northern Trust, Swift, Westpac and the Commonwealth Superannuation Corporation (CSC), proved Australia is no longer on the sidelines.
“There’s a perception that Australia was a relatively slow-moving market for a few years. Other jurisdictions seemed to take the lead as US regulations moved and initiatives like Singapore’s Project Guardian got underway,” Northern Trust’s head of digital assets innovation, Alvin Chia, said.
But over the past 12 months, Australia has moved very quickly.
“There’s now a real ‘whole-of-government’ push, and the industry is shifting from a wait‑and‑see stance to asking, ‘What does this mean for me, and how do I participate?’ The market is in a good position, with more to come.”
Australia has moved from theoretical proofs of concept to live pilots using stablecoins, CBDCs and tokenised carbon credits, all settled against ordinary bank accounts.
The result, according to Chia, is a glimpse of a future where digital assets trade with near‑instant, atomic settlement while investors barely notice the infrastructure shift under the hood.
“Project Acacia is one of the most meaningful initiatives we undertook last year. As a global custodian, we’ve always asked how we can extend our custody, safekeeping and asset-servicing capabilities into the world of digital money – whether that’s CBDCs, stablecoins or deposit tokens,” he told Investor Daily.
Northern Trust worked with the CSC, Swift and Westpac to test tokenised commodity settlement through voluntary carbon credits.
Chia says practical lessons came from the carbon credit use case, and it is clear tokenised assets can fit into institutional workflows, without waiting for a brand-new payments system.
“Rather than wait for digital money to become common, we wanted to show that tokenised markets can be used today by synchronising traditional bank accounts with tokenised asset transactions on a delivery v payment (DvP) basis,” he said.
“One of the most important contributions of Project Acacia is showing that you can use your existing bank account and the current banking infrastructure to participate in tokenised asset transactions today.”
According to industry research from global consultancy Roland Berger, the global market value of tokenised assets could exceed US$10 trillion by 2030, and Chia says this makes scaling tokenisation a live issue.
“When we started, we struggled with a basic question: who is actually going to come to the table and transact? By the time we wrapped up the Acacia pilot, numerous super funds and asset managers were not just doing proofs of concept – they were running meaningful pilots. Stablecoins, digital forms of money and CBDCs were actually being distributed and used.
“The project gave us a snapshot of how the future could look, and that’s what really excited us,” Chia said.
So far, Project Acacia has focused mainly on domestic use cases, but digital assets sit on blockchains that don’t recognise borders. Success over the next two years would mean graduating from pilot programs and seeing digital assets traded in the open market like any other asset class in Australia.
“We want to move from regulator‑approved pilots to day‑to‑day market activity,” he said. “The logical next chapter is interoperability with other financial centres – proving that tokenised assets can move seamlessly across markets, and that liquidity and connectivity are real.”
In the meantime, there is work to be done to resolve friction points between tokenised asset rails and existing custody settlement and risk controls.
“The starting friction is simple: most stakeholders still don’t know how to handle digital forms of money. Policies have not fully caught up, and risk and compliance teams are understandably cautious about allowing large volumes of digital money – whether stablecoins, deposit tokens or CBDCs – onto existing platforms.”
For traditional banks, the hardest part is integrating blockchain-based assets with legacy systems that have been in place for decades.
“You need to reconcile assets recorded on-chain with how they appear in existing reporting infrastructure in a way that is accurate and acceptable to clients and regulators.”
“Many institutions don’t hold wallets as part of their infrastructure, and the idea of holding coins in a wallet is still foreign. Until policies mature and risk and compliance teams are comfortable, volumes using digital money will remain limited. That’s why we say the Australian market is still in its infancy, even though the interest is clearly there.”
From the investor’s perspective, Chia said it doesn’t matter whether an asset is tokenised or traditional – they care about high-quality assets that meet their investment needs.
“We’ve already seen tokenised bonds in Singapore under Project Guardian, and Hong Kong has successfully issued multiple tranches of tokenised government bonds. In the US, tokenised securities and stock markets are being explored.
“These developments show that once demand for tokenised securities is visible, the rest of the supply chain starts to respond – and that’s the trajectory we expect for Australia as well.”
