Australian markets could see billions in savings via tokenization: RBA

Brad Jones, the assistant governor of the Reserve Bank of Australia, outlined the potential benefits of adopting tokenization of domestic markets during a weekend speech.

Speaking at the Australian Financial Review Cryptocurrency Summit on Sunday, Jones emphasized the possibilities of integrating tokenization into Australia’s financial infrastructure.

“The first set of estimates points to hypothetical transaction cost savings in Australian financial markets in the range of $1 – 4 billion AUS [$631 million – $2.52 billion] per year,” Jones said.

Jones cited potential savings that could rise to as much as $13 billion AUS [$8.2 billion] per year for issuers, based on assumptions including “reduced liquidity premia” and lowered costs of the new issuance of financial instruments.

However, Jones cautioned that the figures are “not forecasts” but rather hypothetical scenarios grounded by certain assumptions.

“Ultimately, it won’t be possible to make concrete statements about the effects of asset tokenization…until the ecosystem is better developed,” he said.

Jones outlined multiple candidates for tokenized money, including unbacked cryptocurrencies, asset-backed stablecoins and tokenized bank deposits. He suggested that the adoption of a wholesale central bank digital currency (CBDC) could be the most stable and risk-free option.

“Of the various forms of tokenized money under consideration, only a wholesale CBDC would be completely free of credit and liquidity risk,” Jones said.

Australia is currently exploring the possibility of retail CBDCs, which differ from wholesale CBDCs, with the central bank conducting research to explore their feasibility and potential to reduce capital friction.

The bank initiated a sandbox exploration of potential CBDC applications in August.

Get the news in your inbox. Explore Blockworks newsletters:

Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
Empire: Start your morning with the top news and analysis to inform your day in crypto.
Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
The Drop: For crypto collectors and traders, covering apps, games, memes and more.