Australia Risks Being “Left Behind” As Tokenization Transforms Global Markets

What Happened

Speaking at the National Press Club in Canberra on November 5, Australian Securities and Investments Commission (ASIC) Chair Joe Longo said tokenization, the process of turning real-world assets into digital tokens, is transforming capital markets worldwide.

Longo compared the coming wave of tokenization to past financial technology milestones, such as the introduction of electronic trading and the ASX’s CHESS system in 1994.

He said distributed ledger technology could “fundamentally transform our capital markets,” with tokenization allowing instant settlement, fractional ownership, and greater access for investors.

Longo further outlined ASIC’s plan to relaunch its Innovation Hub to support fintech and market infrastructure experiments, alongside renewed cooperation with international regulators.

He called for legal and regulatory reform to support innovation while maintaining investor protection, arguing that “risk done well is opportunity.”

Market Context

Australia’s financial regulator has warned that the country risks falling behind as blockchain-driven tokenization reshapes global markets, urging swift action to modernize regulations and embrace innovation.

“J.P. Morgan has told me their money market funds will be entirely tokenized within two years,” he noted, adding that Nasdaq and the Depository Trust & Clearing Corporation (DTCC) are also developing tokenized trading and settlement platforms.

In contrast, Australia’s tokenization efforts remain in early stages, with pilot programs like Project Acacia, led by the Reserve Bank and the Digital Finance Cooperative Research Centre, exploring tokenized debt markets.

Tokenization allows assets such as real estate, government bonds, and private credit to be represented digitally on blockchains, improving efficiency, transparency, and liquidity.

According to the 2025 Skynet RWA Security Report, the market for tokenized real-world assets (RWA) could expand to $16 trillion by 2030.

Longo’s concern is that while other nations are adapting regulatory frameworks to attract tokenized capital, Australia risks being sidelined by inaction.

“Other countries are actively courting this capital,” he said. “If we fail to choose, the changes in our markets may not be for the better.”

He pointed to the declining number of listed companies on the ASX and the rise of private markets, warning that an imbalance between transparency and innovation could expose the economy to risks.

Australia’s private credit sector, now worth over $200 billion, has grown 500% in a decade, but Longo noted it remains “untested under market stress.”

Additionally, Longo said his recent meeting with U.S. SEC Chair Paul Atkins made him realize Australia is competing with other nations to attract capital and secure a larger share of the fast-growing tokenization market.

Why It Matters

He cautioned that unless Australia adapts, it could become a “land of missed opportunity.”

Details

“Australia must innovate or stagnate. Seize the opportunity or be left behind,” Longo said in his keynote address.

Global Tokenization Surges Past $35.8B; ASIC Warns of Australian Inaction

The remarks come amid a global race to digitize traditional assets. Switzerland’s SIX Digital Exchange has already processed over $3 billion in digital bond issuances, and the U.K. is trialing a digital securities sandbox through the Bank of England and Financial Conduct Authority.

Globally, over $35.8 billion worth of real-world assets (RWAs) are now tokenized on-chain, according to data from RWA.xyz.

The sector is dominated by private credit ($18.7 billion) and U.S. Treasury debt ($8.7 billion), reflecting institutional appetite for tokenized fixed-income products.

Tokenization’s growth is being driven by major financial players, from BlackRock and J.P. Morgan to DBS Bank, who are integrating blockchain infrastructure into traditional finance.

Can Australia Catch Up as the World Embraces Tokenization?

ASIC has also joined Singapore’s Project Guardian to explore tokenized funds and digital money settlement.