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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.<\/p>\n
Speaking at the Australian Financial Review Cryptocurrency Summit on Sunday, Jones emphasized the possibilities of integrating tokenization into Australia\u2019s financial infrastructure.<\/p>\n
\u201cThe first set of estimates points to hypothetical transaction cost savings in Australian financial markets in the range of $1 \u2013 4 billion AUS [$631 million \u2013 $2.52 billion] per year,\u201d Jones said.\u00a0<\/p>\n
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 \u201creduced liquidity premia\u201d and lowered costs of the new issuance of financial instruments.<\/p>\n
However, Jones cautioned that the figures are \u201cnot forecasts\u201d but rather hypothetical scenarios grounded by certain assumptions.\u00a0<\/p>\n
\u201cUltimately, it won\u2019t be possible to make concrete statements about the effects of asset tokenization\u2026until the ecosystem is better developed,\u201d he said.<\/p>\n
Read more:<\/strong> Legal frameworks \u2018must keep up\u2019 for CBDC implementation: BIS<\/a><\/p>\n 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<\/a>) could be the most stable and risk-free option.<\/p>\n \u201cOf the various forms of tokenized money under consideration, only a wholesale CBDC<\/a> would be completely free of credit and liquidity risk,\u201d Jones said.<\/p>\n Australia is currently exploring the possibility of retail CBDCs, which differ from wholesale CBDCs, with the central bank conducting research to explore their feasibility<\/a> and potential to reduce capital friction.<\/p>\n The bank initiated a sandbox exploration of potential CBDC applications<\/a> in August.<\/p>\n Don\u2019t miss the next big story \u2013 join our\u00a0free daily newsletter<\/a>.<\/strong><\/p>\n
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