Australia may realize A$24 billion in digital finance benefits, but is currently projected to achieve only A$1 billion.

An OKX-supported analysis suggests that tokenization and digital finance could yield A$24 billion annually, with productivity improvements contingent on updates to licensing, regulatory sandboxes, and financial market regulations.

The Australian economy requires updated regulations to fully realize the advantages of digital finance. (Stanbalik/Pixabay modified by CoinDesk)

Key points:

• Australia could achieve A$24 billion annually — approximately 1% of its GDP — from advancements in tokenized markets, payments, and digital assets if legislators renew licensing and market framework rules, as per a recent report supported by OKX.
• Under the current regulatory framework, Australia is projected to capture only around A$1 billion of that potential by 2030.
• OKX is focusing on local approvals and infrastructure in Australia, anticipating that stringent regulations and the nation’s substantial pension capital pool will facilitate the development of a robust, institutional-oriented digital finance center instead of a market caught in a “death spiral of proof of concepts.”

Despite having only 26 million residents, OKX believes that Australia could emerge as a significant digital finance market in the developed world if policymakers act swiftly.

A new report supported by the exchange indicates that Australia could unlock A$24 billion (equivalent to $17 billion) in yearly economic benefits from tokenized markets, payments, and assets, provided lawmakers modernize licensing and market infrastructure regulations.

The report by the Digital Finance Cooperative Research Centre claims that digital finance innovation could generate benefits amounting to roughly 1% of GDP, primarily driven by enhancements in foreign exchange, capital markets, and cross-border payments.

However, if Australia continues on its present regulatory path, it is expected to capture just A$1 billion of that potential by 2030, missing out on a significant portion of the projected digital finance advantage. The disparity between A$24 billion and A$1 billion is central to the industry’s appeal to the government.

“This is especially crucial in Australia, where productivity is the top priority that the government aims to monitor,” OKX Australia CEO Kate Cooper stated in an interview with CoinDesk, highlighting that national productivity growth has remained relatively stagnant for the past decade.

Cooper noted that the concept in the report arose from policymakers frequently requesting data to quantify the impact of cryptocurrency on Australia’s economy.

OKX’s emphasis on Australia may appear unconventional at a time when numerous exchanges are focusing on the U.S. — with rival exchange Gemini having exited the country, along with the U.K. and European Union — but Cooper contends that Australia presents a different type of advantage.

“We have a comprehensive strategy that concentrates on what we refer to as strategic markets, which are areas where there is a competitive edge to establishing a presence onshore,” Cooper remarked.

The strategy relies on regulation as a protective measure. In markets like Australia, where licensing requirements are stringent and compliance expenses are high, operating onshore can create a secure position that offshore-only platforms find hard to duplicate.

For OKX, this translates to investing in local approvals and infrastructure to prepare for institutional flows, especially as tokenized bonds, stablecoins, and digital market infrastructure expand.

In a nation with one of the largest pension capital reserves globally, Cooper explained, being regulated and established locally is less about retail trading volume and more about sustainable access to concentrated capital.

If legislators implement suitable legislation, that capital could propel Australia into a rapid phase of digital finance uptake.

Failure to do so may leave Australia trapped in what Cooper describes as the “death spiral of proof of concepts,” securing only a small portion of the estimated A$24 billion opportunity while the industry — and its capital — transitions offshore.