The future of payments: Australia's tokenization opportunity

Legacy payment and settlement systems remain slow, costly and fragmented. Rob Allen, Head of HEAT at Hashgraph, explains how tokenized money, tokenized assets and interoperable DLT infrastructure could help modernise financial markets, sharing key lessons from Australia's Project Acacia on the future of payments.

Rob, you've spent much of your career focused on moving money and value across financial systems and borders. Looking back, what are the biggest lessons you've learned about where today's infrastructure works well — and where it creates friction?

I’ve spent nearly 30 years building and modernising payment infrastructure, from the UK Faster Payments system to major bank payment platforms across Europe and Australia. That taught me that financial infrastructure works best when it’s trusted, reliable, and invisible to the end user.

Friction appears when value has to move across borders, across institutions, across settlement systems, or across different asset classes. Legacy systems are often highly resilient, but they were designed for a different era. Today, there is mounting pressure to move value continuously, programmatically, and at near-zero cost, and the architecture simply was not designed to keep pace.

Settlement windows, reconciliation, correspondent banking chains, and unpredictable costs are where that friction shows up most acutely. Modern infrastructure must work across the full spectrum, from large-scale institutional settlement to micro-level, low-cost payments. What's particularly relevant now is that this same infrastructure needs to support agentic commerce: a world where AI agents initiate and settle transactions autonomously, at scale, without human intervention at every step. That is not a future consideration… it is already beginning to happen.

Let's connect those lessons to some of your work. Can you explain Project Acacia and Hedera's role within it? What was the project designed to test, and what were the most important findings?

Project Acacia was a national initiative led by the Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre (DFCRC). It explored how digital money and distributed ledger infrastructure could support wholesale tokenized asset markets.

Rather than just asking whether tokenization could work, the project looked at practical questions that matter in real markets: what happens when a real-world asset sits on one network, digital money sits on another, and institutions need to settle safely and atomically across both.

Hedera’s role came through Australian Payments Plus, a Hedera Council member, which proposed three projects using Hedera as its preferred distributed ledger. HashSphere, the private network powered by Hedera technology, was particularly relevant because it allowed participants to test private network environments while also exploring how that infrastructure could interoperate with the public Hedera network.

For me, the key finding was that tokenized assets, trusted digital money, and settlement infrastructure need to be designed together. Tokenization on its own isn’t enough. A recent DFCRC research report presents that there are potentially annual economic gains of up to USD 24 billion if Australia captures the opportunity properly, but Acacia’s bigger contribution was showing what still needs to be built: practical regulation, trusted settlement assets, and infrastructure that connects different environments.

Many in the industry see tokenized real-world assets as a major part of the future financial system. What are the biggest obstacles to making tokenized markets truly interoperable across institutions, networks, and jurisdictions?

The biggest obstacle is not tokenization itself. We know assets can be tokenized. The challenge is making them usable and trusted across institutions, settlement systems, networks, and jurisdictions.

That means solving for governance, risk, legal finality, compliance, and integration with existing systems, not just moving tokens. Institutions need to know what they are settling, what money is being used, whether there is a reliable redemption path, and whether the same level of risk applies across each leg of a transaction.

Without trusted digital money and settlement infrastructure, tokenized markets risk becoming a series of isolated systems: an asset in one place, cash somewhere else, and several intermediaries sitting between them.

The industry is also moving beyond the idea that institutions want to ‘buy blockchain’. Financial institutions want capabilities that plug into their existing systems: issuance, settlement, asset servicing, compliance, custody, and reporting. And because those requirements vary, no single model fits all. That is why easy access to public, private, and hybrid models all matter. Institutions need privacy and control, but they also need connectivity, liquidity, and resilience.

The institutions that will move fastest are those already exploring hybrid infrastructure, in other words, systems that can operate privately where needed but connect to public networks for liquidity and interoperability. HashSphere, the private network powered by Hedera technology, is a direct expression of that model. It gives institutions the privacy and control they require for regulated activity, while giving them the ability to connect to the public Hedera network when they need liquidity, scale, or interoperability with other participants.

Hedera's broader governance model is also a differentiator worth noting. A council of major global institutions overseeing a public permissioned network creates a level of accountability that pure public chains cannot offer and pure private chains cannot match. The question is not which model wins. It is which institutions build the connective tissue between public and private environments first, and whether the infrastructure they choose is designed to make that connection possible from day one.

One challenge often discussed is connecting tokenized assets with the cash leg of a transaction. What did Acacia teach us about how tokenized money, stablecoins, tokenized deposits, and potentially CBDCs can work together to enable efficient settlement?

Acacia reinforced that the cash leg is critical. You can tokenize as many assets as you like, but if you don’t have a tokenized form of money to settle against them, you don’t get the full efficiency of the model.

The project showed that stablecoins, tokenized deposits, and potentially CBDCs can coexist, but only if interoperability and regulatory controls are strong enough. Institutions need to know that there’s a redemption path, that the singleness of money is preserved, and that the risk is properly understood across each leg of a transaction.

One of the important lessons from Acacia was that tokenized assets and tokenized money need to be designed together. For example, in the fixed income use case, tokenized financial instruments could be settled against tokenized money, helping demonstrate how delivery-versus-payment and atomic settlement could work in practice.

It is not just about putting an asset on a ledger. It is about enabling the asset and the money to move together, with settlement finality, appropriate controls, and a clear legal and regulatory framework around the transaction.

This is directly relevant to the regulatory moment we are in now. The US stablecoin and market structure bills, MiCA in Europe, and equivalent frameworks in Singapore, Hong Kong and the UK are all grappling with exactly these questions: what counts as trusted digital money, and who gets to issue it? Australia's work on this through Acacia gives it a head start in answering those questions with evidence rather than theory.

For financial institutions, the challenge is rarely building something new from scratch. How do tokenized asset platforms and new forms of digital money integrate with existing payment rails and market infrastructure?

Building financial infrastructure from scratch is expensive, complex, and often prone to failure. In most cases, tokenized assets and digital money will need to connect to existing payment rails, compliance systems, bank accounts, market infrastructure, and operational processes.

Banks and regulated institutions will adopt these technologies in the same way they adopt other critical infrastructure: through due diligence, risk assessment, compliance approval, vendor checks, and integration with their existing systems.

That’s why abstraction is critical. Institutions don’t necessarily need to understand every detail of the underlying network. They need capabilities that work, and results they can rely on: issuance, settlement, custody, compliance, reporting, and asset servicing. The technology becomes infrastructure, and infrastructure should be invisible.

The institutions that will win are not necessarily the fastest movers; they are the ones that treat tokenization as settlement infrastructure rather than a technology project. In practical terms, that means the first institutions to achieve straight-through processing of tokenized assets against tokenized money, with full compliance and audit trails, will set the benchmark others have to match.

That is a three-to-five year window, and it is already open.

Trust remains central to any financial system. How can issues such as settlement finality, the singleness of money, compliance, and regulatory oversight be addressed in a tokenized environment?

Trust becomes even more important when money and assets move on distributed infrastructure.

Banks already operate within an existing trust model. If money goes missing, there is someone to call. There are regulated institutions, clear responsibilities, legal processes, and consequences when things go wrong. In parts of the blockchain world, that hasn’t always been the case.

For tokenized markets to scale, institutions need the same level of confidence. They need clarity on settlement finality, redemption rights, compliance obligations, operational resilience, and the legal status of the assets and money being exchanged.

Trust also comes from the governance of the infrastructure itself. Hedera, for example, is governed by a council of major global institutions, which creates a layer of accountability and oversight that enterprise adoption demands.

Simplicity is equally important. If you add too many intermediaries, custodians, and fee layers, it becomes harder to understand where risk sits and who is responsible if something goes wrong.

Project Acacia included real-money pilots, not just simulations. Why is that distinction important? What kinds of insights emerge from real-world testing that are difficult to uncover through proofs of concept alone?

A proof of concept can show that the technology works. It doesn’t prove that the system works in the real world.

When real money is involved, even in limited amounts, regulated entities have to go through the actual risk, compliance, legal, accounting, and operational processes. They have to ask: can we settle this, account for it, manage the risk, explain it to regulators, and support it operationally?

That is where the real learning happens. A testnet can show that a transaction is technically possible. A real-money pilot shows whether institutions can use the infrastructure under real constraints.

That was critical because some Acacia pilots involved real transactions, including millions or tens of millions of dollars. That forced participants to test not just the technology, but the governance, controls, and market processes around it.

Looking beyond the pilot phase, what do the outcomes of Project Acacia mean for Australia's roadmap toward tokenized financial markets?

The outcomes suggest that Australia has a real opportunity to lead in tokenized financial markets, but only if the regulatory and market infrastructure evolves quickly enough.

If the estimate of up to USD 24 billion in annual economic gains is correct, the next phase cannot be another long period of analysis without execution. The industry now needs a clear route from experimentation into live market use.

A key part of that should be a reimagined regulatory sandbox that behaves more like an accelerator: clear objectives, coordinated regulators, real market participants, and a practical route for responsible projects to move forward.

Acacia created real momentum by bringing regulators, payment providers, market infrastructure players, banks, and technology firms around practical use cases. The next challenge is to turn that into systems that can operate at scale.

I’ve been working in this area for a decade now, and I’m more optimistic than I’ve ever been. The direction of travel is clear: tokenized money, tokenized assets, and settlement infrastructure are starting to converge. Technologies like Hedera, HashSphere, and Hashgraph’s Cross-Ledger Protocol (CLPR) align well with that shift because they are focused on connecting systems rather than creating new silos.

And more broadly, what lessons should policymakers, regulators, and financial institutions in other countries take from Australia's approach?

Three lessons stand out. First, treat tokenization as market infrastructure from day one. The moment it becomes a technology pilot with no clear path to production; you lose the institutions you need to make it work.

Second, test with real money and real constraints. Proofs of concept tell you the technology works. Real-money pilots tell you whether your legal framework, compliance processes, and operational infrastructure are ready. Australia found out things in Acacia that no simulation would have revealed.

Third, and most urgently: sort out your digital money story. The jurisdictions that will lead in tokenized markets are the ones that have a credible, regulated form of digital money ready to act as the settlement asset. Without that, every tokenized asset sits on one side of a transaction with nothing trusted on the other. The US, UK, EU, and Singapore are all moving, and the window for others to establish their own frameworks is narrowing fast.