Project Acacia: Settlement Asset Shapes Tokenized Market Scale

The Reserve Bank of Australia and the Digital Finance Cooperative Research Centre ran Project Acacia, a program that tested 20 wholesale tokenized asset use cases across issuance, servicing, trading and settlement. Trials covered fixed income, managed funds, repos, structured products, private markets, carbon credits and trade payables. The project aimed to move tokenization from policy discussion into practical market infrastructure testing.

Project Acacia compared four candidate settlement assets in the same test frame: existing exchange settlement account (ESA) balances held at the RBA, a pilot wholesale central bank digital currency (wCBDC), tokenized commercial bank deposits and stablecoins. The report found that the choice of settlement asset largely determines whether tokenized markets can handle institutional trading volumes because the cash leg must provide legal finality, legal certainty, liquidity and operational reliability at the same time.

Using ESA balances keeps settlement in central bank money on existing institutional rails but requires synchronization between tokenized platforms and legacy payment systems and depends on who has access to ESAs. A pilot wCBDC could place risk-free central bank money closer to tokenized ledgers and offer programmability, while raising questions about operation, policy, access and which infrastructure operators would run it. Tokenized commercial bank deposits would keep settlement within the banking system and may suit bank-mediated markets, but they require common technical and legal standards to avoid separate liquidity pools forming by bank. Stablecoins could provide always-on settlement and private-sector distribution, but usefulness depends on credible reserves, clear redemption mechanisms, licensing and market confidence in issuers.

The report identified potential lifecycle benefits from tokenization, including shorter settlement cycles, reduced counterparty risk, improved capital efficiency, automated servicing and fewer operational errors. Those benefits relate to current institutional costs such as reconciliation, failed settlement, collateral movement, prefunding, custody controls and the need for legal finality.

Trials also highlighted persistent barriers. Participants cited gaps in technical interoperability, legal and regulatory uncertainty, the need for industry coordination, fragmentation of liquidity across different money forms, and funds tied up in pre-funded trades as constraints on scale.

Interoperability emerged as a market-design issue. If different platforms settle in different forms of digital money, participants need reliable conversion at par and consistent legal treatment across those forms. Without that, liquidity can split into silos and market venues may require traders or institutions to pre-position funds before they know where a trade will execute. The report noted that the settlement form reshapes which institutions gain influence: central bank balances maintain the role of regulated settlement-account holders, deposit tokens concentrate influence among participating banks and stablecoins introduce private issuers and distribution networks.

The trials ran with regulatory relief from the Australian Securities and Investments Commission, so the activities were constrained testing rather than commercial authorization. ASIC’s 2025 relief for distributors of an Australian stablecoin frames issuance and distribution within an evolving licensing perimeter. RBA Assistant Governor Brad Jones, in a March speech, observed: “Wholesale CBDC could be helpful, but it was far from essential for tokenized markets to get started.” He pointed to nearer-term options such as RITS synchronization, fast payment rails and existing central bank infrastructure.

The RBA and DFCRC set out a follow-up agenda that includes expanded regulator-industry coordination, a possible digital financial market infrastructure sandbox, exploration of tokenized government bonds, work on deposit-token interoperability, consultation on settlement infrastructure and ESA access, and further applied research on wholesale CBDC. The RBA and Treasury have previously concluded there is no clear public-interest case for a retail CBDC in Australia at present and have prioritized research on wholesale digital money and related market infrastructure.

Project Acacia frames the operational and policy questions regulators must answer before any settlement model moves from pilot to production: which settlement models will be permitted, who will have access to each form of settlement money, and what legal certainty and licensing will be required to support real institutional volumes. The next tests will address those specific access, technical and legal arrangements and whether markets operate on interoperable rails or in separate liquidity pools.