- Ripple is working with Australian DECA and DFCRC to advocate for policy changes that support the digital economy and tokenisation.
- The DECA/DFCRC report recommends establishing a digital asset taxonomy, reforming licensing, and adopting regulatory sandboxes.
- Ripple predicts that real-world asset tokenisation could value up to US$16 trillion by 2030, urging Australia to lead with innovative regulations.
- The implementation of these reforms calls for multi-sector collaboration and continual adaptation to evolving technology.
Ripple is working with the local Australian Digital Economy Council of Australia (DECA) and the Digital Finance Cooperative Research Centre (DFCRC) to enhance tokenisation in the country. A report on policy reform is urging lawmakers in Canberra to more proactively support the sector by introducing a regulatory framework.
According to the DECA/DFCRC paper, there are three policy areas that need to be addressed: digital asset taxonomy, reform licensing for digital assets and regulatory sandboxes (like in the UK, EU and Singapore for example).
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Ripple, in its separate report, states that real-world asset tokenisation is expected to reach US$16 trillion (AU$23.8 billion) by 2030.
Ripple said that Australia is pioneering a novel regulatory approach to foster the digital economy and support financial innovation with the recent policy proposal.
By leveraging blockchain, solutions like Ripple Payments aim to reduce intermediaries, enabling real-time, cost-effective, and transparent global transactions.
Ripple’s Director of Policy for APAC, Rahul Advani, commented:
If you’re a responsible innovator, you’re not looking at building for the next one, two or three months. You’re looking at building for the next five or ten years. And what regulatory clarity gives you is clear rules of the road so you know what to build.
Rahul Advani,Ripple’s Director of Policy for APAC
DFCRC Stresses Need for Regulatory Framework
The DFCRC paper highlights the importance of a policy framework that balances innovation in the digital asset industry with “market integrity and investor protection”, stressing cross-sectoral collaboration.
The successful implementation of these reforms will require collaboration across multiple sectors – government, industry, and academia – along with a commitment to ongoing dialogue and adaptation as the technology evolves.
DFCRC
The report emphasises three key reforms for advancing the tokenisation of assets:
First, establishing a clear taxonomy for digital assets is crucial to clarify classifications and reduce legal ambiguities, fostering confidence in tokenised markets.
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Second, the report highlights the inadequacy of current licensing regimes, which separate trading, clearing, and settlement functions; it argues for a modernised framework that can accommodate the combined processes of tokenised assets for more efficient operations.
Finally, the adoption of regulatory sandboxes is advocated as essential for allowing innovation.
The report said that these controlled environments permit the operation of digital asset markets under close regulatory watch, allowing for real-time adjustments and promoting market development.
Notably, countries like the UK and Singapore are already exploring these innovations, with significant Australian banking institutions participating in international tokenisation initiatives.
