As per Australian Securities Exchange Chief Information Officer, Dan Chesterman, the exchange is unlikely to directly list crypto assets due to certain regulatory challenges. He mentioned that there are numerous hurdles and challenges associated with the direct listing of crypto assets.
The tokenized assets would need to have appropriate backing to be listed on the exchange, but they could potentially be listed in the future, such as “appropriately backed” real-world asset gold.
Real-world assets are transformed through the tokenization process into digital tokens that may be traded on a blockchain network and serve as ownership representations. It does away with middlemen, increases liquidity, and allows for quicker transactions. Assets like real estate, gold, and property rights can be traded digitally through tokenization. Real-world assets can now be used in the decentralized finance ecosystem via tokenization.
According to a report and the Australian Securities and Investment Commission, the Australian Securities Exchange (ASX) is the 16th largest stock exchange in the world by market capitalization. During the first quarter of 2023, the ASX accounted for nearly 82% of the total dollar turnover in the equity market.
Similar to top banking executives, Chesterman sees blockchain as an “efficiency driver” rather than a direct listing avenue. The Chairman also noted that in the past, there have been challenges with listing cryptocurrencies on exchanges, and various rules and regulations come into play during the listing process.
The Innovation Officer at National Australian Bank (NAB), Howard Silby, stated that large banks and institutions will continue to experiment with blockchain technology.
Sophie Gilder, the Managing Director of Blockchain and Digital Assets at Commonwealth Bank, believes that the tokenization of digital assets and smart payments will enhance efficiency, reduce risks, and lower associated costs.
The Monetary Authority of Singapore (MAS) launched Project Guardian to explore the application of asset tokenization and decentralized finance (DeFi) for banks. Several participants took part in this project, including DBS Bank, JP Morgan, SBI Digital from Japan, Temasek, and Marketnode, a digital asset platform by Singapore Exchange.
During the initial testing phase, tokenized Singapore government securities, Singapore dollars (SGD), Japanese government bonds, and Japanese yen (JPY) were traded. These trades were facilitated using the Ethereum blockchain’s public network, with the assistance of the Polygon overlay system. Additionally, the DeFi lending platform Aave and the decentralized exchange and automated market maker Uniswap were utilized.