ASIC Sounds Alarm on Global Competition
Australia’s top financial regulator has cautioned that the nation risks losing ground in global markets if it delays adopting tokenization. Speaking at the National Press Club, Australian Securities and Investments Commission (ASIC) Chair Joe Longo stated that tokenization could redefine financial markets by enabling faster, more accessible trading. He warned that without urgent action, Australia could become the “land of missed opportunity.”
According to Longo, distributed ledger technology is transforming capital markets worldwide, allowing assets such as bonds, real estate, and funds to be divided into smaller digital units. These tokens enable instant settlement and broader access to markets once dominated by institutions.
However, Longo said Australia’s financial sector has grown “too comfortable with the status quo,” while other countries are accelerating tokenization efforts. He cited Switzerland’s SIX Digital Exchange, which has issued more than $3.1 billion in tokenized bonds since 2021.
Nasdaq has proposed 24/5 tokenised trading (subject to approvals), and Longo mentioned that J.P. Morgan told him it expects to tokenise its money-market funds within two years. “Once, Australia was one of the early adopters of market innovation,” Longo said. “Now, other countries are outpacing us.”
Industry leaders echoed his concerns. Steve Vallas, CEO of Blockchain APAC, said Longo’s warning “sends a strong signal to traditional finance” and called it the clearest message yet from Australia’s chief market regulator. He added that seeing the pace of change in larger markets underscored the urgency for Australia to act.
Regulator Relaunches Innovation Hub
To accelerate progress, ASIC plans to relaunch its Innovation Hub to support fintech startups and tokenization projects. Longo said the Hub will maintain an open-door policy for innovators facing regulatory challenges, focusing on collaboration rather than bureaucracy.
The regulator also intends to work closely with the government on reviewing the Enhanced Regulatory Sandbox to strengthen the fintech ecosystem. ASIC has already begun discussions with the University of Technology Sydney and the Pawsey Supercomputing Research Centre in Perth.
The collaboration aims to find new ways to manage and operationalize the large volumes of data the regulator receives. According to Longo, these efforts reflect ASIC’s intent to modernize oversight and support technological adoption in capital markets.
The agency’s renewed focus follows updates to its digital asset guidance released last month. ASIC clarified that stablecoins, wrapped tokens, and tokenized securities are classified as financial products requiring licenses. Firms have until June 2026 to meet compliance requirements under the new framework.
Policy Change and Industry Response
ASIC Commissioner Alan Kirkland said the updated rules aim to give companies “regulatory certainty to innovate confidently.” He noted that licensing ensures customer protection and allows ASIC to act when unethical practices occur.
Kirkland noted that most digital assets are already covered by current financial laws and will stay that way under the new changes. At the same time, the Treasury has proposed a new law that would require crypto exchanges and service providers to get financial licenses.
The plan also introduces two new types of platforms, tokenized custody platforms (TCPs) and digital asset platforms (DAPs), by updating the Corporations Act of 2001. Regulators would treat both TCPs and DAPs as financial products, subject to the full scope of consumer protections.
Longo said that other global regulators, including the U.S. SEC and the U.K. Financial Conduct Authority, are moving quickly to establish digital securities frameworks. During discussions with J.P. Morgan executives, Longo was told the bank’s money market funds, holding $730 billion in assets, will soon be entirely tokenized, enabling investors to earn returns while value transfers instantly.
He added that distributed ledger technology introduces competition by allowing new market players to offer services once limited to established institutions. However, ASIC’s recent survey found limited engagement from Australia’s financial sector, with nearly half of the participants declining to meet or provide feedback.
Australia’s Path Forward
Australia’s early leadership in market innovation, such as pioneering electronic trading systems in 1994 and hosting the World Bank’s first tokenized bond in 2018, shows the nation’s potential to adapt. Yet, Longo warned that delay could cost Australia its edge as capital flows increasingly toward tokenized markets abroad.
Industry experts like Steve Vallas agree that the next phase of financial development depends on decisive action. He said conviction must come before capital, urging firms to stop using regulation as an excuse for inaction. Longo’s remarks reinforced that ASIC’s role is to provide clarity and ensure innovation aligns with investor protection and global standards.
Meanwhile, Longo’s remarks show a growing urgency for Australia to modernize its financial systems through tokenization. ASIC’s upcoming reforms, along with Treasury’s licensing proposals, show movement toward regulatory clarity. However, whether Australia regains its innovation lead will depend on how quickly its institutions adapt to the changing global financial sector.