Australia’s central bank has given tokenisation a major vote of confidence: an RBA-backed pilot found that tokenising financial assets could deliver up to A$16.7 billion (~USD equivalent) in annual economic benefits, driven largely by faster settlement, lower back‑office costs and improved liquidity. Why this matters Assistant Governor Brad Jones framed the shift bluntly: “First, we no longer see the main question as whether tokenisation has a future in Australia’s financial system, but rather, how.” The pilot moved beyond theory, testing real-world issuance, trading and settlement of tokenised bonds, private-market instruments and trade receivables on distributed ledger platforms with regulated participants—banks, asset managers and market infrastructure providers. Top findings - Estimated upside: A$16.7 billion annually, mainly from efficiency gains such as reduced reconciliation, lower settlement risk and smaller back‑office costs. - Near‑instant settlement: Tokenised systems can dramatically shorten finality times, freeing capital otherwise tied up during multi‑day settlement cycles. - Better risk and auditability: Interoperable tokenised platforms can reduce counterparty risk, unify siloed markets and provide real‑time transparency into ownership and transactions. - New liquidity channels: Fractionalisation of assets could broaden market participation and make illiquid classes (private credit, infrastructure) more tradable. - Robust methodology: Multiple asset types and use cases were tested, strengthening the reliability of the economic estimates. Institutional momentum The pilot indicates tokenisation is shifting from niche blockchain experiments to a strategic priority for incumbents. As infrastructure and regulatory clarity improve, banks and asset managers are expected to accelerate investment in tokenisation capabilities—because faster settlement directly reduces capital and operational drag in traditional markets. Challenges and next steps The RBA and industry participants stress that scaling will require coordinated work on regulation, cybersecurity and operational resilience. The recommended path is phased integration: allow tokenised systems and legacy infrastructure to coexist and evolve together while standards and safeguards mature. Global context Similar pilots are underway across Europe and Asia, but Australia’s study stands out for the specificity and scale of its economic case. The data provide a pragmatic blueprint for moving tokenisation from experimental pilots into production-grade market infrastructure. Bottom line The RBA-backed pilot grounds tokenisation in measurable economic value rather than speculation. If policymakers and market participants act on the report’s recommendations, tokenised finance could meaningfully reshape settlement, liquidity and risk management—unlocking billions in annual efficiency gains and accelerating institutional adoption. Read more AI-generated news on: undefined/news

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