Australia risks losing its competitive edge in global capital markets as other jurisdictions accelerate tokenization of financial assets, with the nation’s securities regulator warning that inertia could force Australian issuers and investors offshore.
While other countries rapidly embrace blockchain-based market infrastructure, Australian institutions remain “too comfortable with the status quo,” Australian Securities and Investments Commission Chair Joe Longo said, while speaking at the National Press Club on Tuesday.
Longo said that tokenization changes the “exclusivity” once limited to institutional players and high-net-worth investors, by allowing assets like private equity and fixed income to be “broken into smaller, more affordable units, and traded quickly and securely on a global scale.”
“Australia faces a choice—to innovate or stagnate,” Longo said. “Once, Australia was one of the early adopters of innovation in markets… Now, other countries are outpacing us.”
Tokenization in Australia
Speaking to Decrypt, Steve Vallas, CEO of Blockchain APAC, said Longo’s remarks “send a strong signal to traditional finance” to embrace tokenization, calling it a wake-up call for Australia and “the clearest message yet from our chief market regulator.”
Vallas, who said he was in Washington “in rooms that included Mr Longo,” said seeing “the pace of change in these larger and faster markets” made the urgency clear, adding it was a reminder that “the world is moving and adapting and we need to do the same.”
The ASIC chair noted that banking giant J.P. Morgan told him their money market funds will be entirely tokenized within the next two years, meaning “their investors will keep earning while value is moving instantly,” compared to current technology where transactions take days to settle.
Distributed ledger technology allows new players to “offer financial market services and challenge the status quo,” he added.
Longo’s concerns come as industry leaders in the U.S, including former TD Ameritrade chair Joe Moglia, and BlackRock CEO Larry Fink, predict a global shift toward tokenization, while EU markets chief Natasha Cazenave has cautioned that the transformation must be matched with strong investor safeguards.
The “land of missed opportunity”
The ASIC chair said he met with U.S. SEC Chair Paul Atkins, where it became clear to him that Australia is vying for the same global capital as its peers, with only a short window to “seize a larger slice of this opportunity, and if the nation remains passive, it risks becoming “the land of missed opportunity.”
The agency’s recent tokenization survey reportedly revealed troubling disengagement from the financial sector as around half of market participants declined to take part or even meet with regulators, with only one-third providing detailed feedback, according to Longo.
Vallas argued that capital models aren’t the main barrier, noting that, “conviction comes first, capital treatment second,” and saying Longo’s signal helps boards move from hesitation to action rather than using regulation as an excuse to wait.
Longo, who has previously called crypto “highly speculative” and Bitcoin’s rise “a classic case of the bigger fool theory,” said ASIC’s new digital-asset guidance is meant to give industry “regulatory certainty to innovate with confidence.”