Panel Participation Panel Participation at the Intersekt 2026

Thank you so much. It’s our pleasure to be here today to discuss all things Project Acacia.

Now, you probably know a little bit about it, but it might be worth starting with just a couple of high-level comments.

There were 57 industry participants, 20 use cases, and all sorts of money that were considered and experimented with. This was an incredibly broad-ranging examination of not just central bank digital currencies but digital currency more broadly, and the role for wholesale markets.

It’s not just money; it’s what we use money for. As we’ve heard today, everything to do with financial innovation - and particularly tokenisation and payments - is core to that financial innovation strategy.

Brad, that wasn’t the only announcement today. There was also a really exciting announcement from the RBA about some of what we’re going to see post Acacia, building on some of those 10 initiatives that were in the report.

In a little bit we’ll get into that, but I’d love for you to give a bit of background as to what the motivation was for Project Acacia, and perhaps some of the key findings that came out of it.

Good morning, everyone. There were really three things sitting behind Project Acacia. One was a recognition that, while our retail payment system in Australia, I would argue, has been a hotbed of competition and dynamism, we just hadn’t seen the same level of disruption and dynamism in our wholesale markets. So that was the first consideration. So, potentially we’ve been leaving some efficiency benefits on the table as a country.

The second is a growing recognition that capital is mobile in the 21st century, highly mobile, and if our markets are going to remain internationally competitive then we’ve got to offer investors a seamless end-to-end experience. I’ll just note there that somewhere between 50 and 80 per cent of our fixed income securities in Australia are held offshore. We’re very cognisant of that.

The third related element, more generally: technological disruption of the sort that tokenisation represents is almost certainly an inevitability. If it’s going to happen, it’s either going to happen to us - it will be imposed on us - or we can be more proactive, and we lean in and shape that disruption in the national interest. That’s essentially why we set off on that journey.

In terms of what we learnt, I’d say three or four things. Number one: the project revealed to us a strong and growing appetite from industry to explore how money and assets can move across our financial system in a more efficient and less risky way than is currently the case. So that was the first big learning. As you mentioned, we had 57 industry participants. That was a very broad church. We had some very large institutions and some very small institutions.

To give you a sense - since that time, in one of our more recent outreaches with industry, which I’ll come back to in a moment, we’ve had more than 120 expressions of interest. The point we take from that is that the Australian community is leaning in and engaged in a way that maybe wasn’t the case a few years ago.

The second thing we learned, at a more concrete level: the hypothetical benefits around tokenisation and the opportunities for innovation in wholesale markets that have been spoken about internationally - I think we were able to demonstrate those can be realised here in Australia. That’s compressing the time between transactions and monetary settlement to reduce settlement risk, increasing the ability of collateral to move seamlessly through our system, taking layers of cost out of the intermediation process, taking manual errors out of our system. All of those quite concrete benefits, we showed, are available to us.

The third thing is that there are some opportunities to uplift our markets that extend beyond tokenisation or don’t rely only on tokenisation. I think we can sweat our existing infrastructure and payment rails harder than we do today, whether that’s the NPP or whether that’s RITS; better alignment of operational hours for core infrastructure with key global financial centres, greater transparency in funding markets - these are things that don’t require tokenisation, but that, paired with tokenisation, I think could be quite powerful.

We also learnt that, although the ultimate end state for tokenisation is probably a world where assets are issued in a digitally native form and where settlement occurs in tokenised money atomically - that’s the end state, and tokenised assets and money are on the same ledger - there are some incremental steps that almost certainly industry will pursue before we get to that final end state.

The last thing I’d just mention is that, for all of that promise, there are some big thorny challenges in how we do innovation in Australia, and it’s really going to take a Team Australia effort to make the progress that we think is possible.

It’s certainly an area where collaboration is key, not just within industry participants. I think one of the benefits of Project Acacia is that it came not just from the RBA but also the DFCRC. It’s great having both of you up on stage to discuss how this is working.

Perhaps Tālis when the RBA looks at this from a regulatory and practical perspective, the DFCRC also looks at it from a research perspective. Obviously you have a plethora of knowledge and insight, but what was new for you going through Project Acacia? I know you’ve done a bit of research on the quantification; I think 24 billion-plus is the sum in terms of the benefits - can you give us a bit of insight into that side of the work you’ve been doing too?

Yes, thanks a lot. The 24 billion dollars that you referred to comes out of a substantial piece of economic research that we did during and in the lead-up to Acacia, which had a look at what the potential economic benefits of tokenisation in Australia are. We looked across three main categories: making better markets, making better payments, and then making better asset issuance, servicing and distribution channels.

We came to the estimate of 24 billion dollars per annum as the annual productivity unlock or economic gain that’s on the table there, if we can achieve tokenisation at scale. With that backdrop, when we went into Project Acacia there were a few things that really stood out for us. One was the use cases run in Project Acacia, which were largely run with real live transactions - real money, not just simulations. What they did was actually validate for us many of those mechanisms that underpin those estimates of 24 billion dollars of national economic benefits. So we saw those types of things that Brad was referring to: compressed settlement cycles, capital being unlocked that was tied up in transactions. We saw end-to-end automation of asset issuance and lifecycle events. And that really gave us confidence that what we had been estimating - the 24 billion dollars - is actually something that Australia can realise. If anything, we found some evidence to suggest we may be a touch on the conservative side with those estimates.

The second thing that stood out for us in Project Acacia was that many of these benefits of blockchain and distributed ledgers have been framed in very hypothetical and abstract ways, that we could use blockchain for this or distributed ledgers for that. What Project Acacia did was actually make it tangible. It moved from the hypothetical to practical implementations. And because those practical implementations were being done largely with real money and real assets on the line, the use cases had to go through the difficult process of all the legal considerations, the operational considerations, the governance, the risk management, and so on, and a lot of rich lessons about how to actually implement this in practice came out of that, and that stays with the use cases and those who were able to observe them.

We saw very pragmatic solutions - people working around current constraints in the financial system infrastructure, synchronising settlement on a distributed ledger with payment on traditional rails, and various other things that indicate that, despite the varying degrees of maturity in financial market infrastructure, where there’s a will there’s a way, and we’re able to move ahead with tokenisation use cases.

Perhaps the third thing was some of the truly cutting-edge world firsts that were set in Project Acacia. From our research perspective, what was really novel was issuing pilot wholesale CBDC on to both public and private third-party ledgers for research purposes. That was a very novel step that internationally caught a lot of attention. It exposed some of the benefits of having a truly composed atomic settlement on a distributed ledger, where the assets and wholesale CBDC sit in one ledger. But it also exposed some of the dangers of not getting those platforms stitched together and perfectly interoperable, because you can end up with a massive fragmentation of liquidity. So a lot of both positives and negatives came out of that learning.

So clearly there are some significant benefits that were found. What are some of the issues and perhaps barriers to this wholesale market innovation taking off? Brad, what did you see from your perspective?

Some of these pertain to tokenisation specifically, but actually most of them are about innovation in the country more generally. I think the first issue is that the country has been crying out, I think, for mechanisms that are more structured mechanisms to facilitate public-private collaboration. In Acacia we effectively had to manufacture a forum to bring all four agencies from the Council of Financial Regulators together in a room with the CRC and with 57 industry participants. We had to manufacture an architecture to make that work. It was not straightforward. I am delighted about today’s announcement, and that Maha’s review has now sparked - and I’m sure will spark - a concerted effort to think more holistically about the architecture for stimulating innovation in this country.

The second piece would be that we hear back from industry that there are still some areas of legal or regulatory uncertainty that have held back innovation in different ways. That’s one of the reasons the sandbox has been front focused in our response to what we’ve learnt from Acacia.

Finally, there are a few more technical elements. There are issues around, for instance, interoperability between new and existing forms of infrastructure, and there are some technical issues that we still need to resolve. There are issues around - partly related - ensuring that we don’t end up in a world where liquidity is just fragmented across multiple venues. And, finally, there are still some questions around the scalability and resilience of some of these new frontier platforms.

I’m an optimist in the sense that I don’t feel like any of those barriers are insurmountable at all. They might slow things down a bit and they’ll require some careful thought, but I don’t see them as being insurmountable at all.

Tālis, what’s your view?

I agree wholeheartedly with what Brad mentioned there. I’d maybe just pick up on a few things. In Project Acacia, the way we were able to do the real money experimentation was with a broad regulatory relief instrument from ASIC. And the unfortunate thing is that the moment Project Acacia stopped so did the use cases, which really does speak to the fact that one of the barriers they were facing was the regulatory and licensing piece. I don’t want to debate here whether our framework is sufficiently flexible and principles based, but certainly some of the principles that Maha articulates in her review, I think, are really excellent. They shine a light on what regulation is needed to promote innovation, and are absolutely welcome.

The other thing that seems to be a very substantial constraint is that, even if there were no regulatory barriers, adoption isn’t a given. Adoption is stifled by a few things. One is that in the financial system, just in general, there are very strong network effects, and those network effects are particularly strong when it comes to tokenisation and shifting from one account based record-keeping system to another. So you end up with something that we refer to as a first-mover disadvantage, where you might have a bunch of parties that can see the collective benefits if we all were to move across and modernise infrastructure, but we can’t bridge that chasm because of the strong network effects.

There are a few ways to go about dealing with this challenge. One is to have a really tight integration of new infrastructure with existing systems so that it doesn’t feel like a chasm, but rather it feels like financial system activity and there just happen to be two systems in the back end that are recording transactions and holdings.

The other one that I think can jolt the sector out of being stuck in a particular equilibrium, held there by network externalities, is really credible anchor initiatives. There I’d maybe call out the government support for exploring a tokenised government bond as potentially an anchor initiative that could rally a lot of use cases together around a particular part of the financial system, and really get the critical mass required to overcome those network effects.

Moderator

Brad Jones

Moderator

Tālis Putniņš

Moderator

Brad Jones

Moderator