Australia Risks ‘missed Opportunity’ By Shirking Tokenisation: Top...

The head of Australia’s market regulator, Joe Longo, is looking to embrace tokenization in Australia’s capital markets, fearing the country will fall behind if it doesn’t act.

Australia’s capital markets risk being outpaced by other countries unless it embraces new technology such as tokenization, says the country’s head market regulator.

“As other countries adapt and innovate, there’s a real risk Australia could become the ‘land of missed opportunity’ or be passive recipients of developments overseas,” Australian Securities and Investments Commission Chair Joe Longo told the National Press Club on Wednesday.

Over $35.8 billion worth of real-world assets are currently tokenized onchain, which Boston Consulting Group estimated could rise to $16 trillion by 2030, while McKinsey & Co predicted a more conservative $2 trillion over the same time frame.

Market regulators in the US have also floated the idea of 24/7 trading, which “may be more viable in some asset classes than others,” leading finance leaders such as BlackRock CEO Larry Fink to push for the tokenization of everything from stocks and bonds to money market funds as a solution.

Longo said Australia was an early adoptor of electronic trading systems with the Australian Securities Exchange’s securities settlement system, the Clearing House Electronic Subregister System, or CHESS. He noted that the first tokenized bond was issued in Sydney in 2018.

“Now, other countries are outpacing us,” he said. “Distributed ledger technology that facilitates asset tokenisation could fundamentally transform our capital markets, in the same way as the introduction of CHESS once did.”

Longo said he met with US Securities and Exchange Commission Chair Paul Atkins last month, who made him realize that Australia is in a battle with others to court as much capital as possible to “seize a larger slice” of the rapidly emerging tokenization market.

Longo said the regulator is looking to “do more to support innovation from the ground up” and will relaunch its Innovation Hub to support innovation by helping startup fintech firms navigate regulations.

Related: Regulators must protect the architecture of freedom

Source: CoinTelegraph