Project Acacia report paves the way for tokenisation

What you need to know

• On 18 May 2026, the Digital Finance Cooperative Research Centre (DFCRC) and the Reserve Bank of Australia (RBA) released the final report for Project Acacia (Report).
• The Report found that tokenised forms of money can deliver new payment functionality and unlock significant benefits.
• Tokenisation provides both direct and indirect gains to Australia’s wholesale asset markets, particularly in fixed income, repos and and managed funds.
• Many tokenisation projects can proceed under existing law, but must consider regulatory evolution.

What you need to do

• Consider how your operations may use tokenisation and engage with existing and ongoing initiatives in this space.

Tokenisation: the Australian opportunity is here

On 18 May 2026, the Digital Finance Cooperative Research Centre (DFCRC) and the Reserve Bank of Australia (RBA) released the final report for Project Acacia, their joint research initiative exploring the role of digital money in wholesale tokenised asset markets. The report's conclusions are significant: tokenisation can materially improve the efficiency and resilience of Australia's financial system, and the pathway to commercialisation is now being actively chartered.

Project Acacia at a glance

Project Acacia was established in 2024 as a collaboration between the DFCRC and the RBA. It comprised two core workstreams:

• Industry use cases: 20 wholesale tokenised market use cases were developed and tested by industry participants across asset classes including fixed income, managed funds, repos, structured products, private markets, carbon credits and trade payables.
• Deposit Token Working Group (DTWG): A dedicated working group examined key legal and regulatory considerations associated with the issuance of bank deposit tokens in Australia.

Project Acacia builds on a succession of earlier RBA initiatives including Project Atom (Exploring a Wholesale CBDC for Syndicated Lending), Project Dunbar (International settlements using multi-CBDCs), Project Mandala (cross-border settlement) and the RBA's CBDC Pilot Projects. It also sits alongside comparable international programmes such as the UK's Digit and Digital Securities Sandbox and Project Digit (see our alert here regarding our involvement in Digit), Hong Kong's stablecoins and Project Orion and Singapore's Project Guardian.

The opportunity for money

Project Acacia found that tokenised forms of money can deliver new payment functionality (particularly programmability and composability) which may unlock significant efficiency benefits and automation. Tokenised money can exist in several forms, including private money (stablecoins and bank deposit tokens) and wholesale central bank digital currency (wCBDC). Critically, these tokenised forms can coexist alongside traditional non-tokenised money.

On deposit tokens specifically, the DTWG concluded that a deposit can, in principle, be tokenised. However, feasibility will depend on the model adopted. Features such as transferability and the underlying settlement mechanism have direct implications for the legal and regulatory treatment of issuing, managing and using a deposit token.

Project Acacia also confirmed that money issued by central banks will remain a cornerstone of the financial system, even in a tokenised world, particularly in systemically important markets.

The opportunity for markets

The report found that the efficiency and functioning of Australia’s wholesale asset markets can be materially improved through tokenisation, both directly and indirectly. The opportunities span the full asset lifecycle, from issuance and servicing through to trading and settlement. This includes improved capital efficiency through reduced settlement frictions and shorter settlement cycles, reduced counterparty risk, enhanced issuer and investor access to 24/7 liquidity pools, and lower intermediation costs and operational errors through automation of key aspects of asset lifecycle management.

Importantly, many of these benefits were found to result from the integration of trading and settlement functions, rather than from tokenisation. This suggests a structural shift in how financial markets currently operate may be required to realise the full potential.

Project Acacia also recognised that some benefits may be achievable through interim actions to facilitate interoperability. This includes integration layers, more expansive use of existing fast payment rails and central bank settlement infrastructure, better alignment of infrastructure operating hours with global financial centres, and greater transparency in key funding markets.

Legal and regulatory landscape

Project Acacia found that both actual and perceived legal and regulatory barriers persist. Perceived barriers may be capable of being managed within the current framework, though this may involve trade-offs (for example, where a market operator is required, it is possible to identify an entity to fulfil this role, but the resulting system is not disintermediated). Actual barriers may be addressed by incoming or proposed reforms, including the Government's digital asset framework and stablecoins, but others may still remain.

The key takeaway for market participants is that many tokenisation projects can proceed under existing law, even as the regulatory environment continues to evolve.

What comes next

Project Acacia is just the beginning. Following its success, a new multi-stream, multi-agency program of work will be developed to promote responsible innovation in Australia’s wholesale market ecosystem. That program will seek to minimise unnecessary barriers to industry innovation and establish arrangements to support the progression of tokenisation-related initiatives from ideation to commercialisation. This will encompass regulators, industry and the RBA, and is designed to foster safe innovation at scale.

To discuss the opportunities for your business, please contact us at any time.

Next steps for Project Acacia

1. Inter-agency Regulator Working Group to identify, analyse and facilitate resolution of any unnecessary innovation barriers relating to wholesale markets.
2. RBA, DFCRC and ASIC to explore the establishment of a digital financial market infrastructure (DFMI) sandbox.
3. Exploring the opportunities and challenges associated with the issuance, trading, settlement and lifecycle management of tokenised government bonds.
4. C-suite roundtable on the future of tokenised finance in Australia.
5. Reconstituting the industry advisory group as a Joint Regulator-Industry Tokenisation Advisory Group to act as a dedicated advisory forum and coordination body for industry priorities on tokenisation.
6. Continuation and expansion of the DTWG to deepen exploration into the potential form, functioning and interoperability of deposit tokens in a risk-controlled environment.
7. Supporting industry in establishing dedicated industry working groups as needed.
8. Consulting with industry on how the RBA’s settlement infrastructure can support the responsible development of tokenised asset markets and tokenised money.
9. Assessing whether the RBA’s current Exchange Settlement Account (ESA) policy and account structures remain fit for purpose following passage of the Government’s payment service provider licensing reforms establishing a new prudential regime. There does not appear to be a current proposal to broaden access to ESAs (or wCBDC); any such consideration would need to carefully balance the objectives of fostering efficiency and competition with safeguarding the stability and integrity of the payments system.
10. Continued RBA exploration of the policy and operational issues associated with wCBDC.
11. Exploring with international and domestic partners how private and/or public tokenised money, or new uses of the RBA’s existing settlement infrastructure, could enhance the speed and safety of cross-border payments.

Note from Ashurst

Ashurst congratulates all participants in Project Acacia on their role in this groundbreaking initiative. Project Acacia is the next milestone on a long road of careful experimentation to evolve Australia's financial infrastructure for the 21st century.

Ashurst is proud to have been involved in Project Acacia, providing legal support to the DTWG. Hannah Glass, Special Counsel, also sat on the Project Acacia Industry Advisory Group. Ashurst wishes to thank the RBA, DFCRC and all participants for their collaborative approach and for the opportunity to take part.

The views expressed in this article should not be taken to be the views of the RBA, DFCRC or any participant in the use cases or any working group.