Australia could gain billions by strategically embracing innovation in its digital finance sector, as was shown by new research presented at the Australian Digital Economy Conference. This study specifies and outlines the particular opportunities in different financial markets, underlining the foreign exchange and cross-border payments.
By mapping opportunities across the specific financial markets, the research found that foreign exchange came up as the most significant opportunity, estimated at US$4.8 billion per year, followed by cross-border payments at US$7.6 billion. investment funds ($670 million), private credit ($1.34 billion), public debt ($1.07 billion), and private equity ($800 million). Even niche markets, such as carbon credits, present potential gains through tokenization and streamlined trading. Furthermore, more specialized markets, including carbon credits, are identified and recognized for their capability through the implementation of tokenization and streamlined trading mechanisms.
The chief scientist, Talis Putnins, mentioned in a statement shared with Decrypt that Australia finds itself at a critical juncture at the Digital Finance Cooperative Research Centre. He emphasized that by collaboratively and swiftly taking action, the nation could choose a trajectory that enables it to capitalize on this opportunity and solidify its position as a leader in digital finance.
Despite the promising outlook, the research team acknowledges that Australia is not currently on course to realize even half of these potential economic gains. The study’s data revealed that the current target is to unlock only around US$1.8 billion per year by 2030. However, the team reportedly handles and maintains the ongoing engagements with the government to address this discrepancy.
The methodology of the research used in the study mainly aimed at quantifying how blockchain technology improves value exchange. This approach centers on the concept of eliminating intermediaries and substantially reducing friction in financial transactions. The study posits that when settlement occurs instantaneously, as opposed to over several days, and costs are reduced from dollars to cents, entirely new avenues of economic activity become viable.
Kate Cooper, CEO of OKX Australia, commented on the research, noting that it currently captures only two segments. She hinted at broader applications and additional benefits beyond economic impact that are expected to be elaborated upon in the final report, anticipated in November. When questioned about the specific policy or regulatory reforms that would most effectively stimulate the adoption of digital finance innovation in Australia, Cooper pointed out the need for immediate licensing clarity and a resolution to the country’s ongoing debanking issues.
Cooper informed Decrypt that while the Treasury’s digital asset regime is forthcoming, speed is of the essence. She asserted that clear regulations would unlock both capital and confidence, and without access to basic financial infrastructure, innovation operates with significant constraints. The research itself suggests that Australia already possesses the fundamental components, including robust financial markets and strong technological capabilities, to evolve into a global digital finance hub.
However, the primary impediments to realizing Australia’s full US$12 billion digital finance potential include outdated infrastructure, ambiguous regulatory standards, and resistance from certain sectors. Cooper specifically mentioned private credit, commodities, and real estate as sectors that have been slow to embrace tokenization due to perceived disruption and legal complexities.
The pressing question, therefore, is not whether these gains are achievable, but rather how rapidly Australia can mobilize to capture them. Amy-Rose Goodey, CEO of DECA, affirmed that the path forward necessitates coordinated action. She concluded by stating that the groundwork is already being laid for more informed and coordinated decisions as Australia shapes the next chapter of its digital economy.
