The Digital Economy Council of Australia (DECA), an independent industry group, has released a policy paper on reforms needed to unlock the benefits of asset tokenisation and trade digitalisation through reform of the current tax and financial services framework. The paper follows the DECA Proactive Policy Forum, which brought together more than 60 leaders from Australian and international organisations. The result is a unified strategy to update Australia’s regulatory framework in three key areas including tokenisation, taxation and trade digitalisation.
The recommendations aim to modernise laws, foster innovation and position Australia as a global leader in digital assets and infrastructure. The paper sets out priorities in three areas:
- strengthening Australia’s tokenised asset market;
- improving how Australia taxes crypto-token activity; and
- advising Parliament on digital trade reforms.
Advancing the tokenised asset market
During the Tokenisation Roundtable, participants identified three key policy recommendations. First, establishing a clear and innovation friendly regulatory environment for digital assets. For example, by ensuring that agencies such as the Australian Securities and Investments Commission (ASIC), the Australian Taxation Office (ATO) and Treasury use consistent terminology to avoid confusion and coherent policy development.
“We need clear definitions, used consistently to avoid confusion, especially as tokenised RWAs differ from crypto-native assets.” — A roundtable participant
There is also an urgent need to introduce a regulatory framework for AUD-denominated stablecoins. Without it, Australia cannot scale tokenised asset markets or remain competitive with jurisdictions such as the United States which adopted comprehensive stablecoin legislation this month.
“Nothing works without stablecoins. You need the mechanism for payment in your native currency.” — A roundtable participant
The paper similarly urges a fit-for-purpose licensing regime for digital asset markets.
“It’s just not feasible to launch a digital asset market today given the financial market infrastructure licensing … it’s a three-year process of fitting a square peg into a round hole.” — A roundtable participant
The paper encourages reforms to ASIC’s regulatory sandbox to support the commercial deployment of tokenised real-world assets (RWAs). The current sandbox only covers a limited range of products and has been criticised for failing to provide pathways to scale. The UK, by contrast, has introduced a sandbox for digital market infrastructure with flexibility to adjust policy settings. DECA recommends allowing tokenised RWA platforms to test market infrastructure, payment rails and financial products at meaningful scale. It also recommends introducing progressive licensing and structured transition pathways to enable businesses to move from sandbox pilots to full-scale commercial deployment with regulatory certainty.
Third, DECA proposes developing industry best practices to guide compliance and encourage innovation. This should include licensing and compliance guidance, clear engagement channels with regulators, standardised risk frameworks (for example, AML/KYC protocols) and collaboration between ASIC and industry to develop these standards.
Tax reform for crypto-tokens
Roughly six million Australians now hold or have held crypto-assets yet Australia’s tax rules are designed for traditional finance. According to the DECA report, this creates confusion, stifles innovation and increases the risk of penalties. Four urgent reforms are proposed:
- Remove the 10% GST from the sale of fiat-backed stablecoins.ASIC currently classifies stablecoins as non-cash payment facilities, a view many legal experts dispute. Until new laws are introduced, interim administrative relief is needed.
- Define what a crypto-token is and distinguish it from its associated crypto-token arrangement. DECA describes a crypto-token as the right to request a state change on a public blockchain, whereas the arrangement refers to the rights and duties tied to that token.
- Clarify the tax treatment of common activities.These include staking, decentralised finance, tokenised assets and crypto held in managed funds.
- Help taxpayers comply by updating guidance and offering protections.DECA recommends safe harbour provisions for good-faith taxpayers and voluntary disclosure programs for cases with missing records. The paper also recommends implementing the OECD’s Crypto Asset Reporting Framework (CARF) to ensure global alignment on cross-border reporting and enforcement.
Trade digitalisation
Trade digitalisation means shifting from paper-based to digital processes with legal equivalence to streamline and modernise international trade. The benefits cited in the paper include better traceability and fraud prevention, improved productivity and predictability, faster settlements and stronger cash flow.
However, Australia’s trade system is fragmented. More than 30 agencies, 200 pieces of legislation and over 140 digital systems operate in silos. DECA proposes a whole-of-government response. This includes, among other recommendations:
- creating a central agency under the Department of the Prime Minister and Cabinet to lead national digital efforts;
- promoting private sector input, including from SMEs, insurers and digital technology firms;
- facilitating the mandate of real-time gross settlement (RTGS) in banking and payments;
- rebuilding the National Committee on Trade Facilitation to reflect modern needs;
- strengthening collaboration across agencies such as the ATO, Treasury, Border Force and Foreign Affairs, and aligning them under a national interoperability framework for real-time data sharing and compliance;
- expanding support for verifiable credentials and digital product passports to ensure provenance, ESG compliance and supply chain resilience using distributed ledger technology; and
- phasing in a National Digital Trade Platform that integrates customs, logistics, finance, crime management and biosecurity to replace ‘forms’ with ‘data rivers’.
Digitalising trade also requires integrating tax systems such as Business Activity Statement (BAS) reporting with real-time data flows. This means building platforms that connect customs, logistics and payments, and replacing forms with digital records. A phased rollout is advised, beginning with exports and jurisdictions that have already adopted international standards like the UNCITRAL Model Law on Electronic Transferable Records.
A call for leadership
Global standards are moving fast, with other jurisdictions legislating stablecoins, implementing cross-border tax reporting and embracing tokenisation and trade automation. As one participant put it:
“We are already wiring trade for a future where Distributed Ledger Technology (DLT) and interoperability aren’t buzzwords, but lifelines. This isn’t theory—it’s the machinery of tomorrow’s trade, and Australia’s either on board or left behind.”
DECA led a delegation of 50 industry participants to Canberra this week to deliver the paper to Government and the bipartisan Parliamentary Friends of Blockchain group. By learning from international leadership and leveraging our local strengths, the paper provides a blue print for Australia to foster tokenised markets and trade digitalisation. If adopted, the proposed reforms will shape Australia’s competitiveness in the digital economy and, as the paper puts it, send a signal to the world that Australia is “open for digital business”.
