TLDR:
- ASIC warns Australia risks missing global RWA adoption momentum.
- Private credit has surged over 500% to $200B in the past decade.
- Tokenization projects like Project Acacia and Project Guardian are underway.
- ASIC plans to relaunch its Innovation Hub to support fintech regulation.
Australia’s financial regulator has issued a stark warning on the nation’s economic future, urging rapid adoption of real-world assets (RWAs). The call came during a major policy address stressing that Australia must “innovate or stagnate.”
The speech outlined how tokenization and private capital growth are reshaping global markets. Officials emphasized the need for proactive reforms to prevent Australia from falling behind other major economies.
Private Markets Rise, Tokenization Gains Global Momentum
ASIC chair Joe Longo highlighted a decade of rapid expansion in private markets, driven by Australia’s $4.3 trillion superannuation system.
Private credit has grown over 500% to more than $200 billion, offering new funding channels outside traditional banking. However, the trend has also exposed transparency and liquidity challenges compared to public markets.
Longo warned that without intervention, structural imbalances could weaken Australia’s economic resilience.
New technology is central to that transformation. Distributed ledger systems now enable asset tokenization, allowing fractional ownership and faster settlement. J.P. Morgan plans to fully tokenize its money market funds within two years, and Nasdaq aims to launch tokenized securities trading next year, subject to approval.
The ASIC executive said such developments could make Australia’s current systems appear outdated.
Other nations are advancing quickly. Switzerland’s SIX Digital Exchange has surpassed $3.1 billion in digital bond issuance, and the United Kingdom is testing tokenized securities under its central bank’s sandbox.
Australia, once a leader in electronic trading innovation, now risks losing competitiveness unless it modernizes. Longo cautioned that failing to act could turn the country into “the land of missed opportunity.”
ASIC Pushes Framework Reforms to Support Innovation
Australia’s markets are converging as public and private sectors blend under new technologies. ASIC has launched consultations to streamline listing frameworks and modernize regulations to attract investors.
Proposed measures include updating proprietary company thresholds and shortening prospectuses, which have doubled in length since 2005.
Joe Longo is also working with the Reserve Bank on Project Acacia and joining Singapore’s Project Guardian to test tokenized funds and digital money settlements. A revitalized ASIC Innovation Hub will focus on supporting fintech and regtech startups by identifying and removing regulatory barriers.
The speech also placed the private credit industry on notice, calling for stronger practices to protect investors.
If improvements fail, ASIC may consider new laws to ensure stability and transparency. The executive urged collaboration between government, industry, and academia to build “the guardrails” for Australia’s digital financial future.
