Australia has laid out a bold, government-wide strategy to regulate and integrate digital assets into its financial system. In a newly released Treasury white paper, the government outlines a plan inspired by the European Union and Singapore, targeting tokenisation, stablecoins, and central bank digital currencies (CBDCs) to modernise the economy.

Whole-of-Government Approach

The Australian Government is adopting a collaborative regulatory framework involving key institutions like the Treasury, Reserve Bank of Australia (RBA) and the Australian Securities and Investments Commission (ASIC). These bodies will explore different aspects of digital finance, including real-world asset (RWA) tokenisation and wholesale CBDC infrastructure.

While a retail CBDC is not on the table for now, Australia is keen on exploring a wholesale version, aimed at boosting market efficiency through tokenised settlements and streamlined financial processes.

Pilot Trials and Tokenised Markets

To move from theory to practice, authorities plan to launch pilot projects involving tokenised money, including stablecoins, to settle transactions in wholesale markets.

According to the white paper, tokenised markets have the potential to:

• Automate financial processes
• Minimise settlement risks
• Reduce reliance on intermediaries
• Lower transaction costs
• Improve access to traditionally illiquid assets

These trials are expected to be foundational for building a digitally enhanced financial infrastructure.

Licensing Crypto Exchanges as Digital Asset Platforms

Australia is introducing a new licensing regime for crypto exchanges, which will be classified as Digital Asset Platforms (DAPs). These platforms must adhere to strict financial standards, including:

• Capital adequacy
• Disclosure obligations
• Use of third-party custodians for securing customer assets

The government’s goal is to bring crypto exchanges in line with traditional financial service providers, enhancing consumer protection and operational transparency.

Tackling the ‘Debanking’ Dilemma

Addressing one of the crypto industry’s biggest pain points, Australia’s DAP regime also aims to tackle debanking. By offering clear regulatory guidelines, the government hopes to foster stronger relationships between crypto firms and banking institutions, ensuring better risk management and financial access.

This move comes as global concerns rise around unjustified debanking of crypto firms—a topic recently debated in the U.S. through Senator Tim Scott’s FIRM Act, which seeks to curb regulators from cutting off crypto firms based on “reputational risk.”