3 min read
Billions in economic gain could be achieved if Australia develops a strategic approach to innovating its digital finance sector, according to new research revealed at the Australian Digital Economy Conference held on Monday at the Gold Coast, Queensland.
Mapping specific opportunities across financial markets, the study found that foreign exchange emerged as the most significant opportunity, estimated at approximately US$4.8 billion annually, followed by cross-border payments at US$7.6 billion.
Additional opportunities span several asset classes: 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.
"Australia is at a key fork in the road," Talis Putnins, chief scientist at the Digital Finance Cooperative Research Centre, said in a statement shared with Decrypt. "By working together at pace, we can choose a path that allows us to seize this opportunity and make Australia a digital finance leader."
Still, the team acknowledges the country "isn't currently on track to realize even half of the potential economic gains," though it says that it has ongoing engagements with the government.
Data based on the research indicates that only around $1.8 billion per year is expected to be unlocked for economic gains by 2030, assuming the current pace continues.
The research methodology measured how blockchain technology enhances value exchange, essentially eliminating intermediaries and reducing friction in financial transactions.
When settlement happens instantly rather than over days, and costs drop from dollars to cents, entirely new economic activity becomes possible.
OKX Australia CEO Kate Cooper, meanwhile, noted the research captures just two segments currently, with “additional benefits to be gained from digital finance innovation beyond economic impact," she said, hinting at broader applications in the final report due in November.
When asked what specific policy or regulatory changes would best boost the adoption of digital finance innovation in Australia, Cooper pointed to the need for licensing clarity and addressing the country’s debanking issues.
“Treasury’s digital asset regime is coming, but speed is everything. Clear rules will unlock capital and confidence,” Cooper told Decrypt. “Without access to basic financial rails, innovation is operating with a handbrake on.”
The research suggests Australia already possesses the foundational elements: strong financial markets and its technological capability, to become a global digital finance hub.
Still, the biggest barriers to unlocking Australia’s full US$12 billion digital finance potential include outdated infrastructure, unclear regulatory standards, and resistance from sectors such as private credit, commodities, and real estate, which are slow to adopt tokenization due to disruption and legal complexity, Cooper said.
What remains as a question, however, isn't whether these gains are achievable, but how quickly the country could mobilize to capture them. The path forward requires coordinated action, according to DECA CEO Amy-Rose Goodey.
Already, the groundwork is being laid "for more informed, coordinated decisions as we shape the next chapter of Australia’s digital economy," Goodey said.
Edited by Sebastian Sinclair
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